How the Right Product Positioning and Pricing Can Increase Your Sales
As a small business owner, it is very important for you to position and price your products in such a way that you achieve maximum sales and profit margins.
However, there are some factors that need to be considered so that product positioning and pricing can bring about an increase in your sales.
Researching Your Market
You should conduct research in your market and find out what prices have been set by your competitors for similar products. Find out the warranty and after-sales service features offered by your competitors as well.
Next, find out what superior and inferior products cost, as compared to your products. You can now determine the strength and weakness of your product’s prices, as compared to the other products on the marketing; and can find an empty slot that you can position your product in.
This method will reduce competition, since your product will be in a position where superior quality products are priced higher and inferior quality products are priced lower.
Select Your Product Position Either by Basic or Premium Pricing
Depending on the product, you can either just add your profit to the product cost and sell it off; if the product is rare, is an artifact or is technically complex, you can add a premium to your profit margin.
This will put that product in the premium segment due to the halo effect’. For example, a Mercedes and a Suzuki Hatchback will both take you from point A to B; but in the case of Mercedes, the word ‘luxury’ adds a premium to that product – and it is therefore positioned at a different level.
You will need to add a little ‘more’ to your product if you want to position it at a higher level.
