Marketing Tips – Small Business Pricing

Pricing is a key determinant in the decision making process customers use to purchase your product or service as well as a key element in determining the profitability of your business. Setting a price for your product or service that appeals to your target market and encourages them to buy is therefore an essential part of your business and marketing strategy.

Before determining your pricing strategy for your business it is important to consider the following:

Your Customer

An effective marketing strategy begins and ends with your customer. It is therefore important to establish how much your customers are willing to pay for your product or service, how sensitive your customers are to changes in price and how price discounting will affect the level of demand and profitability of your business.

Your Product or Service’s Features and Benefits

Unless you have a product or service that offers a unique or additional benefit, and you can communicate this benefit adequately to your target market, if your price is too high you may price yourself out of the market. Look at the features and benefits your product or service offers and how they compare to your competitors. Remember the benefits you provide can either be physical, emotional or both. For example, some customers may see a high price as equalling high quality and are therefore willing to pay a premium.

The Cost of Doing Business

Before setting your price you need to determine what your small business must charge for its product or service in order for you to make and sustain a profit. Look at what the cost and expenses are of doing business and what price you will need to sell at to ensure these expenses are covered. Unless you have a sustainable cost advantage, if your price is too low, your sales volume may not generate enough revenue to cover the costs associated with your business.

The Market and Your Competitors

Your competitors play an important role when setting your pricing strategy. For example, there may be competitors nearby where customers can compare prices so you may need to price match. If it is hard for your customers to compare prices you may be able to charge a premium.

Distribution Channels

Some customers may expect to pay a different price for a product or service depending on which distribution channel they use. For example, if a customer purchases a product over the internet or by mail they may expect to pay a lower price due to the elimination of the middle person i.e. the retailer.

Life Cycle of Your Product or Service

At different stages of your product or service life cycle you may change your pricing strategy to suite your business needs. For example, when you are launching a new product or service you may adopt a low price strategy to encourage trial and repurchase of your product/service on a regular basis. Alternatively if your product or service has a unique point of difference or high cost of production you may charge a premium over your competitors. As your product or service grows in customer awareness and credibility you may be able to sustain a price increase. Alternatively as sales increase, your production costs may be reduced and you may be able to pass on some of these savings in a price reduction or regular promotional offers.

(c) Marketing for Business Success Pty Ltd 2008

Using Your Small Business Marketing Tools to Differentiate Your Business

Perhaps the most important quality for your small business marketing materials is that they are different. If you do nothing else right in your small business marketing, at least be different.

Why is differentiation so important? Because, in most industries, there are hundreds – if not thousands or millions – of other businesses that claim to provide the same service or sell the same product as you do. If you don’t differentiate your business from all those others, the chances that you’ll get many customers are pretty slim.

Some common ways to differentiate your business are:

Superior service

Greater product availability

Higher quality

Better performance

Greater durability

Prestige

Technology leadership

Satisfaction guarantee

Lower cost

Faster delivery

More customer support

But even if you are very different than your competitors – you offer superior service, greater durability, or a satisfaction guarantee that beats all others – it won’t matter unless your prospective customers know about it.

That’s where your small business marketing strategy comes in. Businesses have been using their small business marketing strategies to announce how they’re different from their competitors as long as they have been using small business marketing strategies. Think Maxwell House’s “Good to the last drop,” Campbell’s Soup’s “Mmm, mmm good,” or WalMart’s “Always low prices.” Those highly successful taglines not only get prospective customers to remember the company name, but also convey a message about the difference between that company and others.

To make differentiation a part of your small business marketing strategy, you first need to understand your competitors – you can only explain how you’re different from them once you know what they’re like. Learn what your competitors offer, how they differentiate themselves, and – most importantly – what your prospective customers think about them (if you know what qualities your prospective customers see as shortcomings in the other companies in the market, you’ll have a good idea of the market gap you can fill).

Once you’ve decided how you are different from your competitors, you need to tell your prospective customers about it. Building that differentiation into your tagline can be a very effective start. Then include that tagline, along with your logo, on every piece of small business marketing collateral you have. Another small business marketing way to publicize your differences is to write a press release. Explain how you’re filling a need in the market that no other company has filled.

Once you’ve differentiated your company and used your small business marketing tools to publicize your differences, you have to follow through on your promises. If you say that you’re the cheapest – or the highest quality, or the friendliest, or whatever – then you better be just that (nothing turns away a customer like a failed promise).

Corporate Business Solutions – Getting Sophisticated With Time

Voice over internet protocol, or VoIP as it is commonly called, has metamorphosed the way one can communicate over geographical distances and in real time. It can be said that VoIP has had a hand in making the world a smaller as well as a better place. Businesses, for one, have been among the first categories of users to reap the wide array of benefits that this high-end technology has to offer. More and more businesses are realizing the tremendous scope that an adoption of VoIP can open up before them. As a matter of fact, the corporate business solutions have become high-end and innovative with the adoption of this very useful technique of sending voice as well as data over Internet networks.

But we would come to that later. First and foremost, we have to understand the rising significance of clear and distinct channels of communication for the proper functioning of any business establishment. There has to be a free flow of information; both within the organizational structure as well as outside. Colleagues within a particular corporate establishment should be able to communicate freely within their organization. Moreover, the organization as a whole should be able to have an uninterrupted channel of communication to connect with partners, suppliers or branch offices, which could be located almost anywhere in the globe. Moreover, a degree of cost efficiency is very much desirable in these channels. The latest corporate business solutions, powered by VoIP, can do all these and quite a bit more.

It can be said that these VoIP solutions have revolutionized the telecommunication domain and nothing is the same as before. High speed broadband connections have taken the place of traditional telephone systems. With special hardware and software of VoIP in place, the business users are able to make the most of these specialized business solutions. The support provided by broadband networks becomes important in this context. With the routing of voice and data over broadband internet connections, users are able to enjoy good call quality. In addition, the data congestion is also reduced to a significant extent.

As a matter of fact, there is more than one benefit of using corporate business solutions. Some of these benefits are mentioned below:

1. Lowering of infrastructural costs: With business VoIP solutions, there is a significant reduction in the telephone costs. The provision of free calls to certain areas offered by many providers of such services make them all the more valuable to potential users.

2. Availability of additional options: The solutions come with a number of highly innovative options that include features such as call waiting, call routing and voicemail. In this context, these solutions score a point over the traditional phone lines.

3. Flexibility in operation: The voip solutions on offer come with some very amazing options that enable their easy adoption by different businesses from diverse backgrounds. In addition, easy updation of these solutions as well as seamless integration with existing networks makes these solutions very much popular among business users.

So, the fact that many organizations having global presence are reducing their communication related expenditure through these solutions should not come as any surprise. Other business establishments that are making the most of corporate business solutions are the ones having call center operations.

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