Answer:
Explanation:
1. Competitive level - Most entrepreneurs love the concept of selling their products at a very high margin. This idea can only be true if you have a monopoly on the market. However, you can't sell at the profit margin you want without having to suffer from competition. Competition is one of the most effective factors when it comes to adopting a product's pricing strategy or setting a price that suits your product. The stronger the competition in your industry, the more priced the strategy and policy of your product should be.
Here is the point I am trying to emphasize; If your competitor sells the same product you sell, but at a lower price, it could have a negative impact on your business. Therefore, a feasibility study or a work plan always includes a section of opposition or competition analysis. First, never follow the pricing strategy of your product without considering your competition. Evaluating your product without ignoring your competitor's product pricing strategy is a surefire way to fail; it is not.
2. Acceptable value of your product - This is another factor that you should consider before setting a price for your product. Your first step is to ask: What is the value of my product in a customer's heart? Before you set a price for your product, you should try to find a good and clear answer to this question. That is, if your product is very valuable, customers will feel that the materials used to make the goods are inferior and therefore the product is of poor quality. Therefore, before you set a price for your product, make sure that you balance the value of your product with its perceived value.
3. Product Development Cost - This is definitely a factor you can't see. The costs incurred as a result of research and practice are the costs incurred in bringing innovative products to market. If you are a business owner, you should know that new products are often highly regarded.
4. Economic Trends - This is another inevitable factor that can affect the price of your product. I don't even need to stress this much. As an entrepreneur, you should know that economic factors such as tax rates, labor costs, inflation rates, exchange rates, government's fiscal and monetary policies will have a positive or negative impact on the product's pricing strategy.
5. Market Demand Level - This is the fifth factor that can have a significant impact on your product's pricing strategy. As an economic factor, I think this is self-explanatory. If demand in the business economy surpasses supply, there is a mad rush for a few products available, so the price of the product is inflated and vice versa. Some companies are even going to create artificial scarcity to get a stronger grip on industrial prices.
6. Demographics - Demographic characteristics of the target customers will undoubtedly affect the price of your product. Demographic factors to consider before joining your product price:
Age of the target customers
- Your place of work and client's location
- The educational status of your target market
7. Target customer class - The target customer class has a great impact on the value of your product. There are three classes of people in the community. Rich, middle class and poor or more preferably "low-income", which is always overwhelming in terms of population.