Price,and,Perception,How,Set,Y marketing Price and Perception: How To Set Your Value In The Market


Automation technologies represent a fundamental aspect of any modern industry. The major types of industrial automation solutions, such as DCS, PLC, SCADA, and MES, are used on a large-scale in process and discrete industries.DCS technologie Awhile ago, I got an email from one of the "gurus" I follow and it shocked me. The gist of it was this person wanted to trade services for a household item.To say it floored me would be an understatement.What was worse was a few days later t


Normal 0 false false false EN-AU X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-priority:99;mso-style-qformat:yes;mso-style-parent:"";mso-padding-alt:0cm 5.4pt 0cm 5.4pt;mso-para-margin:0cm;mso-para-margin-bottom:.0001pt;mso-pagination:widow-orphan;font-size:10.0pt;font-family:"Times New Roman","serif";}Price andPerception: How to set your value in the marketThe price of your productor service should be a reflection of its value. Most consumers intrinsically believe in the “you-get-what-you-pay-for”philosophy. So what’s the right price for your offering?I don’t have a magicformula for setting price, but I will share with you a key to determining theright price: value.Whatis Value?Value is the inherentdesirability of your product or service to your customers.  It is reflected in your brand.  The greater the perceived value of yourbrand, the higher the price you can and should charge.Takechocolate, for example.  Bulk chocolateis cheap.  It’s not the tastiest treat,but if a customer is making a buying decision based on price, its good value.  A good mid-range chocolate such as Nestle orHershey’s will be a bit more costly, but customers will value the establishedreliability of the mid-range chocolate brand and will be prepared to pay theprice.  At the high end of the pricescale there are chocolates that sell for more than $1000 per kilo.  And yes, customers are willing to pay theprice.  Why?  Because they want a chocolate of the finestquality, guaranteed to tantalise their taste-buds and melt in their mouths. Theprice of these chocolates makes a bold promise, and to these customers thevalue of that promise supports the price. Isyour Business offering Bulk or Prestige?When you set your prices,you need to consider your value to customers. Low prices may equal bulk sales, but they reflect low quality.  That’s OK if that’s what your customers wantand that’s how you want to position yourself. High prices equal high quality, and if that’s your position you need tomake sure your customers know the value you provide with the price. If you clearlycommunicate your benefits and target the market that values those benefits,your customers will be more than willing to pay your price.The PainfulPitfall of Pricing too Low Some businesses,especially in these difficult economic times, are tempted to discount theirprices or set their prices too low.  Themotivation behind this decision is usually fear rather than overall brand orbusiness strategy.  Myfriend, a plumber, fell into this trap. He intentionally set his price at $40 per hour when his competition wascharging between $50-$150.  He was a newplumber so he was scared he wouldn’t get any business if he charged what theothers did. He advertised, and then he waited. And he waited.  But he didn’t getany calls.  Eventually he asked his mentor,another plumber who charged $120 an hour and had a booming business, what hewas doing wrong.  It turns out thatpeople are scared of hiring plumbers who charge less than the going ratebecause they equate price with value or quality and they’re usually right.  The mentor was often called in to fixproblems that cheaper plumbers had left behind. My friend the plumber increased his rate to $90 and quickly grew aprofitable business.Low prices send a messageof low value.  That can be damaging to yourbusiness image and brand.  What’sthe Right Price?To set the right priceyou need to consider 2 things:your positioning strategy: bulk, midrange or prestigeyour customers’ perception of valueClearly communicate yourvalue and set your price to reflect it. Don’t be fooled into thinking you need to compete on price when it isjust as viable and often more profitable to compete on value.

Price,and,Perception,How,Set,Y

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