Pricing iQ
Should we raise the price or not?
Deciding whether or not to increase the price of a particular product or service in a particular
market often seems to be more of an art than a science.
It involves more than calculating the costs or estimating the price elasticity of demand. The price
sensitivity of your customers and their ability to switch suppliers is important. The attitude of your
competitors and distributors is important too. One must also carefully assess the degree of risk of
losing revenue and profit.
The Pricing iQ iPad app helps you or a business team assess the case for increasing the price of a
particular product in a specific market that will assist managers come to a shared understanding and
agreement on what should be done.
The issues it covers include:
Price Sensitivity
This includes consideration of customer familiarity with the product, their wealth and the proportion
of their total costs this product accounts for.
Price Leadership
This includes market share and the nature of the competition.
Attitude of Distributors
This also includes market share and the nature of the competition.
Risk from lost business
This includes your possible loss of your profit from this product in this market (which is reduced if
your costs go up) and also the current supply position. If supply is tight, then you have less risk in
raising prices.
Click here for details of the Pricing iQ iPad app.
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