A 12 minute introduction to pricing concepts. The big companies simplify and manage their costs using simple techniques. But they are not misled by accounting formulas, gross margins, and gross profits. And they have never forgotten that the purpose of the company is to earn a return on the money invested. . Their technique sheds blinding light on ALL the costs of doing business. Small businesses can profit from this analytical approach.
Have you ever wondered if there is just a better way of pricing that would allow you to compete with the big boys? Would you like to increase sales without dropping the price? How can you become the price leader instead of the price follower in your industry?
Andrew Gregson, pricing expert and author of Pricing Strategies for Small Business, begins this talk on new ways to look at pricing with an interesting anecdote. Every retailer is totally convinced that ending a price in 99cents somehow fools the customer into thinking that here is a better price. But until the late 19th century, even number prices were the norm. This changed with the arrival of a simple machine. And that simple machine was adopted quickly because it kept store clerks honest.
The big companies rely heavily on vicious attention to cost accounting techniques. But they are not misled by accounting formulas, gross margins, and gross profits. And they have never forgotten that the purpose of the company is to earn a return on the money invested. The big companies simplify and manage their costs using simple techniques. Their techniques shed blinding light on ALL the costs of doing business.
Now you have found all your costs. Does this mean instant profits? What to do next. Gregson demonstrates by means of real life business examples how to translate your efforts into a winning price formula. Your company can achieve Super Profits using the same simple techniques employed by the big companies, without dropping prices, and without losing sales.
However, sometimes price has nothing to do with costs. Here are real life examples of prices going up and sales rising up, too. And then, here is evidence that dropping prices can actually hurt sales. Still not convinced? Still believe that your business has to sell on price alone? Here is one final and compelling example to convince you. This is an entire market sector with a thousand different niches and a thousand different pricing levels but where the costs are identical across the board.
• Why prices end in 99 cents. And why big box store prices end in funny numbers like 34 cents, or 72 cents or 17 cents.
• Big box store pricing revealed.
• Using that method in your small business. Examples from retailing and service businesses.
• Some responses to pricing are just plainly odd.
• The most underrated marketing success ever.
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