Pricing can determine whether your business succeeds or fails – yet too many entrepreneurs rely on guesswork or back-of-the-napkin calculations to set prices. This course reveals a proven methodology for developing a pricing strategy, as well as ways to increase customer perceptions of value so you can justify higher prices and boost margins.
As part of the process, you’ll learn how investors evaluate pricing strategies, the advantages and drawbacks of different pricing models, how to calculate margins, average margins for specific industries and retail categories, how to gauge price sensitivity, and how to build a pricing profile specific to your offering based on eight key variables.
Tips and examples are included for both product- and service-based businesses, as well as businesses that contend with seasonal pricing variations. The session offers guidance on bundling, discounting, and other pricing techniques, which you can apply in a workshop session that walks through the pricing strategy framework step by step.
The price you set for your product or service broadcasts its value to potential customers. This video provides an overview of the many variables that impact the pricing, pricing models, and using competitive analysis to achieve competitive pricing and healthy margins.
What Price Communicates
You would be amazed at how much information you communicate to a consumer with your price. Let's explore what a consumer (or business buyer) hears when they see your price.
Coming up with your pricing strategy is not easy, but we will guide you through the process and that process starts with scenario-based pricing.
Types of Pricing Strategies
There are three primary types of pricing strategies you can use for your business. This lesson will help you in determining the ideal pricing strategy for your business.
What Investors are Looking for in Your Pricing Strategy
Investors will be very interested in your pricing strategy. We will review exactly what they look for so you can consider incorporating that into your pricing strategy.
Test Your Pricing
There is nothing more important than to test your pricing strategy with actual buyers. We will examine exactly how to do that.
The 3 Pricing Models
How will you price your product? Gain an understanding of three key pricing models: Cost-based pricing, market-based pricing, and value-based pricing. This overview includes a look at popular products and service's pricing models - yogurt, dry cleaning, nutrition bars, furniture, house cleaning, nail salons, hotels, and more.
Guess The Pricing Model
To get you warmed up, here is a quick exercise that presents a handful of well known companies and asks you to guess their pricing model.
Examples of Pricing Models
Let’s take a look a bunch of examples of pricing models from companies that you will be familiar with.
Case Study: T-Shirt Pricing
Here is a great case study to help you understand how the various pricing models can be applied to a T-shirt business.
Common Pricing Strategy Mistakes
Don’t make the same mistake so many other entrepreneurs do when creating their pricing model. We will give you the common mistakes to avoid.
Key Steps to Pricing Strategy
Here is a framework for you to follow when creating your pricing model. We have broken this down into 5 easy steps to follow.
Researching Your Market
The best place to start when trying to figure out your pricing model is researching what is already out there. Check out your competition and see what models they are using. Will you try and differentiate by using a different pricing model? Or will you be more successful using a model customer already are used to?
Case Study: Researching the Competition
Let's take a look at a case study to better help you understand the best ways to research the competitive pricing models.
Know Your Margins
Gain an understanding of how margins work so that you can choose the right price for your product or service. Having a justified pricing strategy will help you avoid common mistakes such as guessing at price-setting, skipping competitive pricing research, leaving money on the table with a too-low price, or misunderstanding the whole value of what you're offering. Learn how supply and demand for your product or service impact price, how to quantify the level of value you're delivering (don't under-value it!), and how market forces impact your pricing.
Average Industry Margins
Margins can vary widely industry by industry. Here we give you a snapshot of the most popular industries and the expecting margins for each.
Pricing Influencers Explained
Learn how your pricing influencers can impact your overall pricing strategy.
Pricing Variable 1: Competition
Learn how demand for your product can impact your pricing strategy. We will provide you key strategies to use when examining consumer demand.
Pricing Variable 2: Demand
Give careful consideration to the eight pricing influences explored in this video: Competition, demand, uniqueness, scarcity, quality, margin, being first/market saturation, and the customer value-perception. For each of these pricing influences, Ken explores tactics that you can apply to your business, supporting you in setting the most appropriate price for your product or service — without leaving money on the table. If you don't already know what a Cabana Combo is, you soon will!
Pricing Variable 3: First of a Kind
Learn how being first to market can impact your pricing strategy. We will provide you with key strategies you can use.
Pricing Variable 4: Uniqueness
Learn how uniqueness of your product or service can impact your pricing strategy. We will provide you with some key strategies you can use.
Pricing Variable 5: Scarcity
Learn how scarcity of your product or service can impact your pricing strategy. We will provide some key strategies for you to consider.
Pricing Variable 6: Quality
Learn how quality of your product or service can impact your pricing strategy. We will provide some key strategies for you to consider.
Pricing Variable 7: Margin
Learn how your product or service margin will impact your pricing strategy.We will provide some key strategies for you to consider.
Pricing Variable 8: Customer Perception of Value
Learn how customers' perception of the value of your product or service will impact your pricing strategy. We will provide some key strategies for you to consider.
Scoring Your Pricing Influencers
The next step in the process is to score your pricing influencers so you can determine which are most important for you to consider.
Overview of Pricing Models
Let's take a look at the three different kinds of pricing models. Here are the three different pricing models:
- Cost based pricing
- Market based pricing
- Value based pricing
Choosing a Pricing Model
Now it is time to choose the optimal pricing model for your business. We will guide you through the process.
Common Mistakes in Pricing
Heads-up on some common mistakes entrepreneurs make in developing their pricing strategy.
Case Study: Setting Your Price
This case study illustrates all the steps necessary in creating a profitable pricing strategy for your business not just the pricing model used. While you are welcome to watch it, not all the concepts illustrated in the case study were covered in this course.
I recommend that you download this handy course guide to aid your journey through the course as well as great reference materials for the future.
- I'm not graduate from economic bachelor and English is not my mother tongue. But this course and how Mr. Ken explained the content is really easy to understand for beginner like me. Thanks to Mr. Ken for answered all of my question with a fast and easy understandable answer! ~ Diantini S
- Perfect timing and the insights till now are those that I was exactly looking for.... Excited to learn more ~ Yogen P
- Such an amazing course. You'll be able to understand and create your own business plan and you'll get a lot of valuable advices ~ A Cerimagic
- Lot’s of info in this course. Ken really takes you from A to Z . Just what I needed for my business to take off. Thanks ~ Hugo M
- I'm new to the business world and have been looking for courses with practical guidance. This course definitely provides that and so much more ~ S Slawinski
- So far so good! A lot of challenges I'm facing in my work place Ken has highlighted the root course, which I was not expecting. He is clear, very engaging and breaks down the jargon. He is straight talking, right down to business attitude. I've just completed the first chapter and he's restoring a little faith in me so quite excited to keep learning (I know, I sound like a nerd) ~ Harrie T
- This course is the right match for me as I know some about business but believe in always improving. I also want to make sure I have a solid foundation for my business so I'm positioned right for the new year, and growth ~ E Jollymore
What you'll learn
- How do customers perceive price and value?
- What are ways I can add value that boost margins, not costs?
- How can I justify higher prices in a competitive market?
- What will customers pay more for?
- Why is pricing important to potential investors?
- Which pricing model should I use for my business?