Defining the pricing strategy

Raising or lowering prices can bring both positive and negative for your business so it is a really difficult decision to make direct impact.

If price rises, sales could fall, which will have fewer benefits than before, if instead decides to lower prices, sales could increase and compensate for a lower profit margin.

The million dollar question is: what to do with the pricing strategy?
Large number of entrepreneurs, small businesses and companies that are aimed at the same niche market sell similar products or services without any strategy that differentiates them from their competition, which are perceived almost in identical manner by its prospects.

Not the same price value
Two companies that target the same niche market with products or services very similar changing prices on the same items for the same amount, but the two companies can get very different results:

Why do they have different results?
Very simple for the perception of inherent value to the product or service, is not the same price value, most people do not move only motivated by the item price but by value that represents for him.

You can change the price and let the value equal (the perceived quality did not vary much) or can enhance the perceived value allowing it to change up the price of your product or service.

As you can see the perception of value that have their prospects play a very important role in the decision taken as to whether raised or lowered prices so it’s very important to be aware that to define the prices of what they sell.

Make analysis before taking decision
Before taking any decision that affects the prices of your products or services, you should do an analysis of what sells your business from your competitors. The result may help you to establish and improve the perception of the value inherent in the product or service you’re selling and how it might affect your customers a strategy of raising or falling prices. In this way, you could almost predict with accuracy the reactions that may have your competitors.