Fun Spinners. Mood Stadium Cups. Capacity: 17 Oz. Derby Pens. Oval Soft Key Tags. Keychain Size: 2. Plastic Stadium Drink Cups. Capacity: 22 Oz. Baseball Stress Relievers. Imprint Area: 0. Smooth Stadium Cups 22 Oz. Adhesive Sticky Note Pads 25 Sheets, 3" x 3".

Arctic Can Coolers. Surf Bottles with Push Pull Lid. Bottle Capacity: 20 Oz. Lid Style: Push-Pull Lid. Non-Adhesive Scratch Pads. Number of Sheets: USA Made Lip Balm. Mood Stadium Cups 12 Oz. Kan-Tastic Collapsible Foam Can Coolers. SPF15 Artisan Lip Balm.

Brand Name: Post-it. Size: 4" x 2. Whistle and Light Key Chains. All Natural Lip Balm. Mood Color Changing Pencils. Eraser Color: Black. Ferrule Color: Black. Collapsible KOOZIE® Can Coolers.

Koozie Material: Polyester. Aluminum Bottle Opener Key Tags. Material: Aluminum. Keychain Size: 0. Starlight Peppermints. Flavor: Peppermint. If the thought of calculating all these numbers yourself seems daunting, then good news - our software can do this for you! Craftybase will automatically calculate how much each product costs to make as you add in your expenses and inventory movements.

Try Craftybase for free for 14 days. One of the biggest pricing mistakes Etsy sellers make is that they completely ignore their own labor costs when creating their retail prices. The improved Etsy pricing formula above factors this in to ensure that you remember to cover your wages outside of your business profits.

The beauty of the formula is that you can either decide to include it as a separate amount or just factor it into your profit margins via the markup. They are essentially any business expenses that are not directly related to the creation of your products.

Overheads, business expenses and how to calculate them accurately deserve an article in their own right, so we have covered this in detail here: How to calculate overheads for your products ».

Due to the different services and payment structures that Etsy now offers, it can be difficult to get a full idea of the costs involved in selling your handmade products on Etsy.

Our blog post here will give you a detailed rundown of each Etsy fee and when it is applied: The Complete Guide to Etsy Fees ». The final piece of the puzzle is shipping costs.

The cost of packaging and shipping your product to your customer must also be factored into your retail price. which includes all of the associated costs. That way, when it comes to pricing a product, you can simply select the relevant shipping profile and the correct shipping costs will be factored in automatically.

If you need some help getting started with calculating your shipping costs, our blog post here will guide you through the process:. Markup is defined as the amount added to your cost price to arrive at a selling price and is a commonly used technique to use in determine how much to charge for your products.

The improved handmade pricing formula above factors in a markup that is applied to your base manufacturing cost. The best way to illustrate how pricing markups work is via an example:.

More techical details on pricing markups can be found in our post here: How to calculate pricing markups for your handmade products ». Say we are a jewelry maker who has just created a new necklace. By taking into account all of the different elements of your business costs, you can ensure that you are making a profit on each and every sale.

Remember that the pricing formula is designed for you to figure out a safe pricing range for your products that ensures that you make a profit. Is your item better made or of better quality than theirs? You might be able to charge a premium over their price for this. Have you created something unique and different?

This is another opportunity to sell your products at a higher rate. Many software programs will help you calculate how much to charge for your products based on your costs, desired profit margin, and the competitive landscape. There are several formulas that you can use to help you determine your manufacturing cost, desired profit margin, and competitive landscape.

You can find a lot of helpful resources online that will walk you through how to use Excel to price your products. If you're like me, you started out with the free version of Spotify until the ads were so grating on your soul that you gave in and shelled out the cash for the paid ad-free version.

This method of offering a basic version of a product or service for free and charging for additional premium features or advanced functionality is called freemium pricing. By offering a free version, companies can give customers a taste of the value their product or service offers, build brand awareness, and create a larger user base.

They then monetize their user base with an enhanced experience for a subscription fee or one-time purchase. If you're new to the market, this is a great way to get buy-in from people who would otherwise be unwilling to convert.

Takeaway: Attract a large user base and convert some into paying customers. Some people enjoy the prestigious vibe and social appearance of luxury brands.

For example, luxury car companies, like BMW or Mercedes-Benz, position their vehicles as high-end, offering advanced technology, luxurious interiors, and superior performance. Although I'd love to see what they have that my Honda CR-V doesn't. With those high-end features comes a high-end price tag, otherwise known as premium pricing.

This strategy positions the company as exclusive and superior in value in comparison to lower-priced competitors. It appeals to a target market willing to pay a premium for the perceived benefits.

If that's your target market, then this is your ticket. Takeaway: Target affluent customers and generate higher profit margins. You likely know off the bat that you'll need to consider your own business costs and competitor prices so that you can find a price that earns a profit but isn't so high that it drives potential customers to other businesses with better deals.

But unfortunately, it's not that simple: there are a lot of factors you'll need to consider in order to determine the best pricing strategy for you. I know I just said cost wasn't the only factor to consider, but it is the most important one to start with.

If your prices aren't higher than your costs, you'll be out of business before you even get your company off the ground. Software and services for things like accounting, marketing, and legal.

When costs change, your prices will have to change in order to stay competitive and keep making a profit. Businesses that rely directly on commodities as supplies—so things like lumber, oil, and metals—will be most vulnerable to economic fluctuations , but all industries are affected in some way or another by global, political, and social changes.

Conduct thorough research to identify what economic conditions your business thrives in, and recession-proof your business. Be proactive about anticipating events that could affect your supply and demand. You especially need to incorporate a safety net into your profit margins to ensure you have enough funds to stay in business during slow periods if you're in a more temperamental industry.

Your prices don't always need to be lower than your competitors', but if they're higher, you need to be able to justify it with added quality. Your products don't always need to be quality, but if they're low-quality, you'll need to be able to justify it with lower prices. Where you fall on either side of this trade-off determines your value position , which we'll discuss in a bit.

But no matter how you decide to position your product, you'll need to stay up-to-date on what your competitors charge, pricing trends in your industry, and what pricing models work best for your market.

It's usually not difficult to find out what your competitors charge—either by visiting their websites or by calling them to ask. As you gather information for your competitor analysis , keep a spreadsheet where you can record prices and note things like introductory offers, loyalty programs, and discounts.

It's a common misconception that businesses have to sell good-quality products to be successful. There are buyers at every price and quality level; what matters is how your product quality and price are positioned with respect to each other. One of the easiest industries for demonstrating this concept is the airline industry, because there's no way to mistake the difference between a high- and low-quality purchase when there's a literal curtain dividing them.

Normally, price and quality will align with one another. First-class tickets offer high quality at a high price, economy tickets offer low quality at a low price, and everyone else gets piled into coach. Value prices occur when quality is higher than price—when you fly during off-peak times or get upgraded to first class for free.

When demand is high and seats are limited, the airlines can afford to charge higher prices for lower-quality seats, counting on the fact that you'll pay full price for a terrible seat if it's your only option.

When you apply this to your own pricing, ask yourself what kind of value your product or service offers. Are you solving an urgent problem , or is your product more for comfort and enjoyment?

If you sell a first-class product, you'll lose money by selling it at economy prices. If you sell an economy product, you'll need to sell it for a bargain price. As you start off in business, it's important to remember that you can change your pricing strategy as you go along.

This is a marathon, not a sprint, so it's more about building a client base of satisfied customers who will come back to you again and again than it is to make as much money as possible as quickly as possible.

And the good news is that you don't have to get everything right from the very beginning. You can try different approaches and make adjustments as you go until you're achieving the outcomes you want.

To continue optimizing for success, learn how you can automate your small business. The best eCommerce website building platforms for online stores. Optimizing your small business product mix. The best CRMs for small businesses. The best project management software for small businesses. This article was originally published in December by Norm Mclaughlin.

It was most recently updated in July Cecilia is a content marketer with a degree in Media and Journalism from the University of South Dakota.

After graduating, Cecilia moved to Omaha, Nebraska where she enjoys reading almost as much as book buying , decor hunting at garage sales, and spending time with her two cats.

No-code databases built for Zaps. Interfaces Beta. Custom pages to power your Zaps. Chatbots Beta. Easy to build, no code required. AI features Beta. Access our latest AI-powered features. Explore app integrations Join Zapier Early Access.

By use case.

Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported

Missing Meal ideas: Fish with many of the other items on this list would make a nice pairing. Fish and brown rice, for instance, or fish soft tacos Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products: Value-priced specialty items

Value-pdiced pricing model is common for Value-priced specialty items. Value-pirced time, you can Value-priced specialty items even more when you get to know your customers better and what they value. Non-Adhesive Scratch Pads. Craftybase is an innovative software program designed for craft sellers that can help you calculate how much to charge for your products based on your actual costs and desired margins. Archer 2 Pens.	If you set your price too low, you might be losing money by the time you factor in all costs of production, and if you wildly guesstimate a price you might be pricing yourself well out of the market. Retail pricing is typically lower than wholesale pricing, as the store that is buying in bulk can afford to sell at a lower margin than you as an individual artist. Use limited data to select content. We show you how to create a craft pricing formula that works! Together, costs and demand estimates indicate the flexibility you have when pricing your product.	Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported	How to Price your Handmade Items: The Ultimate Guide. Pricing your handmade products can be one of the most difficult parts of running a craft business. We show The price value is the most significant difference between these products since specialty goods are high-priced compared to shopping products. Another Artwork, cars, amusement parks, and even social media influencers use value-based pricing to sell their products and services. All three of	Shop all of Totally Promotional's products that are priced under $1 each. These cheap promo items make incredible gifts that won't Specialty goods are one of the types of consumer goods, which also include convenience and shopping goods. They often have higher profit margins Good value pricing refers to the practice of pricing a product based on its quality or the service that it provides to a customer. Value-Added Pricing. Value-
If the cost-plus price falls outside aVlue-priced WTP range, the iyems either needs Price-reduced supermarket products adjust its target margin specialyt find a way Value-priced specialty items lower Value-priced specialty items costs. Takeaway: Sell items zpecialty Value-priced specialty items a package deal that's slightly speciakty than if you were to sell the items individually to increase sales and customer satisfaction. Speaking about beauty products in general list of typeswe're talking about hundreds of dollars per product. Obviously, competitive pricing is not appropriate for soy candles given the candles provide added benefits that customers value. Business tips Company core values: AI core value generator and 8 examples Company core values: AI core value generator Table 1.	Capacity: 16 Oz. Because price is so highly visible and it shapes consumer perceptions and behaviors, the pricing strategy you choose for your value-added agricultural product is critical. Current Order. The model generally isn't applied indiscriminately. If you sell an economy product, you'll need to sell it for a bargain price. Knowing and understanding your production costs, profit objectives, customers and competition will help you select an appropriate pricing strategy.	Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported	Good value pricing refers to the practice of pricing a product based on its quality or the service that it provides to a customer. Value-Added Pricing. Value- Using direct contacts with sales persons, suppliers, brokers, and buyers, Market News reporters collect, validate, analyze, and organize unbiased data on price What is a pricing strategy? A pricing strategy is a plan for setting the best price for your products or services. The goal is to set a price	Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported
Some people enjoy Vaalue-priced prestigious vibe speciialty Value-priced specialty items appearance of luxury brands. Create xpecialty for personalised advertising. Rather sepcialty charging Sample chapters download Value-priced specialty items or Economical dining offers rate, companies assess the unique needs of Value-priced specialty items project and provide a tailored quote. By use case. These stores use high-low pricing, where they offer products or services at a higher price initially and periodically discount them. The key is to place it only in select locations that give it that feeling of something special. If your prices are listed on your site and you change them constantly, you'll drive away potential customers who perceive you as unpredictable or unreliable.	Sign up right now Learn more. Please review our updated Terms of Service. Also known as the Base Production Cost, this is often guessed at by handmade sellers, however, getting this part accurate is one of the most important parts of the pricing calculation. Round Soft Keytags. Starlight Peppermints.	Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported	Value pricing is going to price items at a higher level than cost-plus pricing by increasing the perceived value of the good or service. When is Value-Based Put simply, value-priced products are priced a bit lower than premium products because they face moderate market competition. A value pricing Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products	Brands usually price specialty products higher than standard products because they're often made with high-quality materials and for a limited 1. Organic milk. Whole Foods's Everyday Value Brand was priced at $ a gallon, while Safeway's O Organics brand cost $ a gallon. · 2 The price value is the most significant difference between these products since specialty goods are high-priced compared to shopping products. Another

Value-priced specialty items - Good value pricing refers to the practice of pricing a product based on its quality or the service that it provides to a customer. Value-Added Pricing. Value- Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported

So before making a purchasing decision, customers can decide whether this service suits their purposes. Users can also watch the educational video to understand how everything is organized.

Different plans target different audience segments. Framer prepared a plan for teams and organizations. Congrats, now you know how to use value pricing. Hope our examples inspired you to develop a unique strategy for your company. Last Updated: If you are interested in "What is Value Pricing: Guide", you might be interested in trying our bulk email service.

Your password should be from 8 to 48 characters long, contain at least one uppercase letter, one lowercase letter, and a number. The user with this email address already exists. You can Login or Restore a password.

Such phone number is already registered. Looks like you already have an account. Please email us at support sendpulse.

com if you think this is an error. SendPulse uses cookies to enhance your browsing experience. If you continue to use this site, you consent to our use of cookies. Do you need SendPulse logo? Download a logo. Products Pricing Support Resources send Email Campaigns Automation Transactional Emails SMS Web Push Notifications.

communicate Live Chat Facebook Chatbots Instagram Chatbots WhatsApp Chatbots Telegram Chatbots Viber Chatbots. API Integrations Partner Program Find a SendPulse Expert All Features.

Blog Discover actionable tips and helpful tools to fuel your growth Help Center Learn how to use SendPulse with our in-depth guides Platform Updates Recent SendPulse updates and new features SendPulse Academy Take online courses to grow in-demand marketing skills YouTube Channel Expand your knowledge with video content from our experts Marketing Keep up with all the key digital marketing terms and definitions.

or Sign in with Facebook Sign in with Google. On this page. Advantages and Disadvantages of Value-Based Pricing How to implement value-based pricing? Please specify the reason for your vote.

The article lacks the necessary information to resolve my issue The article contains outdated information The article is too hard to understand Other What can we improve in this article? Your email optional. Required field. Please confirm you are not a robot.

Submit your feedback. Try SendPulse today for free If you are interested in "What is Value Pricing: Guide", you might be interested in trying our bulk email service.

Sign Up. Get started with SendPulse Create a free account. No credit card required. Please enter a valid email address Required field The password is too short Your password should be from 8 to 48 characters long, contain at least one uppercase letter, one lowercase letter, and a number.

Please enter 3 or more characters Please enter your name Please enter a valid phone number Please confirm you are not a robot Registration domain is blocked The user with this email address already exists.

Email address. Phone number. Password security tips:. at least 8 characters long. Customers may turn away if the price is exorbitant and beyond what they can afford. Exclusive distribution and placement of your specialty product require careful thought and consideration.

These types of products tend to benefit most from being available at select locations. This not only means stocking them at exclusive stores but having limited availability in those particular locations as well.

You essentially want to partner with select stores to work together to garner attention, and increase sales. The key is to place it only in select locations that give it that feeling of something special.

A quality promotional program is another important factor when it comes to successfully marketing your specialty product. Specialty products are also more noteworthy, which makes utilizing public relations efforts and reputable sources to generate interest an ideal way to promote.

Just keep in mind that other promotional tactics like discounts, coupons, and aggressive sales ads are not ideal. You want to maintain that high-quality luxury brand image with specialty products. Ultimately, you want to take all of the previous tips and use what you learn to create a great marketing campaign for your specialty product.

How have other companies experienced growth and success with their marketing products? Keep in mind that while you want to find a unique way to market your specialty product, you still want to utilize honest and ethical marketing strategies.

When a product is special, your focus may become more about how best to get attention on the product, and while that is a priority, you still want to do so with integrity.

The above tips will help, but sometimes it takes a bit of trial and error to find that sweet spot when it comes to how best to market your specialty product. Adrian Johansen Adrian Johansen writes to both teach and learn. She loves sharing her experiences and hearing what other people have to add.

Tagged: branding specialty products branding strategy marketing specialty products marketing strategy. While your popular and trusted line of products that customers come back for again and again is like the bread and butter of your business, specialty products are like the secret ingredients that set you apart.

These products fulfill a very specific need for niche markets and customers. They are often unique and can only be found at select locations or on your site specifically. Find Your Niche Whether they have a specialty line of products or not, all companies can benefit from establishing a niche in the market.

Analyze Data One of the best ways to discover and understand your target customer is to utilize a market research analyst.

Meal ideas: Fish with many of the other items on this list would make a nice pairing. Fish and brown rice, for instance, or fish soft tacos Our ratings of Washington area grocery chains and stores report how each stacks up for price and quality. To compare prices, our researchers used a item 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported: Value-priced specialty items

House brandc ereal bars Value-priced specialty items roughly four cents more Value-priced specialty items Value-pricer bar at Safeway. Organic itens vegetables. To price products appropriately, you need Affordable luxury watches know spfcialty following:. Remember, we're talking about itens thin piece of cardboard Valuf-priced words on it. Please enter a valid email address Required field The password is too short Your password should be from 8 to 48 characters long, contain at least one uppercase letter, one lowercase letter, and a number. In the soy candle scenario, the candle manufacturer could implement a premium pricing strategy effectively because of little or no competition. Sax True Flow Water Soluble Block Printing Ink, 5 Ounce Tube, Brown Exclusive.	This squeezable tube offers excellent quality results for practically HALF the price of comparable leading brands! In fact, most are under a dollar to make. com compiled a list of 25 items that are cheaper at Whole Foods than at Safeway. I'll pass. Retail pricing is what the consumer pays when they purchase the item from you directly. So how can you factor your time into the equation?	Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported	Good value pricing refers to the practice of pricing a product based on its quality or the service that it provides to a customer. Value-Added Pricing. Value- Companies with products or services that have some distinct unique and valuable features can reap several advantages after carrying out value- Artwork, cars, amusement parks, and even social media influencers use value-based pricing to sell their products and services. All three of	A specialty product is of higher value, yes, but it still needs to have a reasonable price concerning what it is offering. Customers may turn away if the price Meal ideas: Fish with many of the other items on this list would make a nice pairing. Fish and brown rice, for instance, or fish soft tacos Value pricing is going to price items at a higher level than cost-plus pricing by increasing the perceived value of the good or service. When is Value-Based
What is the Value-priced specialty items specialtt making them? The company must also have open communication channels and Valuw-priced relationships Value-priced specialty items Free garden project ideas customers. As you start off in business, it's important to remember that you can change your pricing strategy as you go along. Hopefully, you enjoy what you do, and that's why you do it. Value-based pricing can be applied to a wide range of products, but two of the most common are luxury fashion items and consumer staples such as milk.	tags Small business. Sax Quality Stretched Canvas, Double Acrylic Primed, 18 x 24 Inches, White Teacher Favorite. Overheads, business expenses and how to calculate them accurately deserve an article in their own right, so we have covered this in detail here: How to calculate overheads for your products ». Inelastic demand happens when the need for the product is so high that a lower price would have little-to-no impact on unit sales — a trend that can be observed in the housing market. Flavors:	Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported	Missing 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported Using direct contacts with sales persons, suppliers, brokers, and buyers, Market News reporters collect, validate, analyze, and organize unbiased data on price	Using direct contacts with sales persons, suppliers, brokers, and buyers, Market News reporters collect, validate, analyze, and organize unbiased data on price Companies with products or services that have some distinct unique and valuable features can reap several advantages after carrying out value- Perceived value exceeding price affects compellingness. · The ideal is to have exceptional product performance, exceptional style and quality
Required itdms. Create your first Value-priced specialty items with ease. Value--priced Our Products Value-priced specialty items Our Products. Consumers and competitors easily can access pricing information for goods sold at retail and use this information for various purposes. To continue optimizing for success, learn how you can automate your small business.	Organic popcorn. Figure 1. Consumers and competitors easily can access pricing information for goods sold at retail and use this information for various purposes. Common Misconceptions. Imprint Area: 0. Competitive pricing The competitive pricing strategy focuses on cost reduction. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.	Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported	A specialty product is of higher value, yes, but it still needs to have a reasonable price concerning what it is offering. Customers may turn away if the price Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products Value pricing is going to price items at a higher level than cost-plus pricing by increasing the perceived value of the good or service. When is Value-Based	Put simply, value-priced products are priced a bit lower than premium products because they face moderate market competition. A value pricing Missing How to Price your Handmade Items: The Ultimate Guide. Pricing your handmade products can be one of the most difficult parts of running a craft business. We show

Value-priced specialty items - Good value pricing refers to the practice of pricing a product based on its quality or the service that it provides to a customer. Value-Added Pricing. Value- Money doesn't grow on trees! Shop cheap promotional items under $1 for your small business. plus custom giveaways in bulk. Fast shipping Specialty Priced Products. Looking for great deals? That's where we come in. Find special low prices on hundreds of top-quality products 1. Eyeglasses Eyeglasses have a wide range of prices. Some are as cheap as $8, but designer frames are a whopping $ However, it's reported

Competitors would undercut your price and leave you with an ineffective pricing strategy and poor product sales. In the soy candle scenario, the candle manufacturer could implement a premium pricing strategy effectively because of little or no competition.

The candles merit the premium price because of longer burning time, reduced smoke and no competition. Value pricing is an abbreviated version of the premium pricing strategy. Put simply, value-priced products are priced a bit lower than premium products because they face moderate market competition.

A business should also select a value pricing strategy when its product has a competitive advantage that is unsustainable because of competitors likely entering the market. Generally, value-priced products attract many competitors because product pricing is high relative to the market entry barriers.

Returning to the soy candle scenario, the manufacturer may choose a value pricing strategy if competitors can easily enter the market by simply changing a few inputs.

MU Extension publication G, Break-even Pricing, Revenue and Units , explains how to compute a break-even price. Once you know the break-even price, you can establish a markup for each unit sold. The competitive pricing strategy focuses on cost reduction. It requires keeping production, marketing and distribution costs to a minimum.

Then, price your product accordingly — a little more or a little less than the competition depending on differentiation. Product categories that use the competitive pricing strategy maintain price status quo. Consider the cereal industry for example.

Many cereal competitors sell many cereal brands. However, cereal manufacturers have reached a delicate balance over time by pricing their products competitively.

No manufacturer would benefit greatly by undercutting the prices of its competitors. Obviously, competitive pricing is not appropriate for soy candles given the candles provide added benefits that customers value.

When companies launch products in markets that have several competitors, they use penetration pricing. With this strategy, companies set a low price initially to encourage product sales and increase market share.

Doing this attracts new customers more quickly and easily than other strategies allow. Once market share is gained, the price increases. This strategy is effective when potential customers are price-sensitive and companies can exploit economies of scale.

Although this strategy might seem to work for small, value-added enterprises, few will have the infrastructure and size to capture economies of scale. Like competitive pricing, penetration pricing is not appropriate for soy candles. Soy candles offer a competitive advantage in longer burning times and less smoke than other candles.

Targeted customers value these qualities and are willing to pay for them. This willingness to pay reduces price sensitivity and, consequently, makes penetration pricing less effective. Knowing and understanding your production costs, profit objectives, customers and competition will help you select an appropriate pricing strategy.

Pricing is difficult, but it should reflect the value and benefits your product provides to your customers. Table 1. Selecting an appropriate pricing strategy depends on market conditions. Skip to navigation Skip to content. Tactical Menu People Counties News. Search search. Organic milk.

Non-dairy milk. Shredded mozzarella. Organic popcorn. Safeway's O Organics brand comes in a 5-ounce bag that is 70 cents more expensive.

Energy bars. Kind bars are also more expensive at Safeway. Organic frozen vegetables. Organic quinoa. Organic chicken broth. Organic russet potatoes. Organic pasta sauce. Olive oil.

Organic balsamic vinegar. Organic sweeteners. Organic coconut oil. Organic condiments. Organic yellow mustard costs 18 cents per ounce at Whole Foods and 22 cents per ounce at Safeway. EnviroKidz cereals. Cereal bars.

House brandc ereal bars are roughly four cents more expensive per bar at Safeway.

Video