Pricing For Maximum Profits
By Gauher Chaudhry
There are four key components of the entire marketing
process. They are known as the 4 P's of marketing.
I will touch on the importance of assigning the right price to
your product or service. This is one of the most overlooked
aspects of marketing.
Choosing the right price for your product or service is very
important to help maximize your profit potential. Not only
that, but your price can also help people make a judgment about
the quality of your product or service
For example, a company such as Rolex sells their watches for
thousands of dollars. Often this high price is associated with
the prestige of the watch. If they started selling the
Rolex watches for only $99, this would dramatically affect the
perception people would have of these watches.
On the other hand, if you price your product or service too low,
it can give the perception to a customer that your product is
cheap and of low quality. This can results in reduced sales.
Most companies use the bottom-up approach to pricing their
product or service. This means that they take all the costs
associated with the making of the product and then traditionally
mark-up the price a certain percent which is the company's
Other factors in determining a price is competition, type of
market and overhead costs. some companies deliberately set
their prices high to reap large profits. This reduces their
sales, but give them less customers to work with.
Other companies deliberately set their prices low (even at a
loss sometimes) in order to penetrate the market. They then
offer back-end sales to their established customer base.
There are a couple of methods that you can use to determine the
best price for your product or service.
The first method to determine your optimal price is by sending
out a survey to your present customers. For example, you may be
releasing a new ebook and may not have a clue on what to price
But since you have 100 customers who have purchased a previous
ebook from your company, you can solicit their opinion on what
they think your second ebook should be priced at.
Send them to the sales page for your second ebook and instead of
including a price, link to a survey that asks a variety of
questions that will help determine the cost of your ebook.
The second method to price your product or service is by
testing. You can create up to four or five duplicate sales
pages with different prices for your product or service on each
page. Advertise each page exactly the same way and view the
conversion ratio from visitors to sales.
By looking at which page converts the most visitors, you will be
able to determine what the optimal price is that customers will
buy your product or service for. However, it is important to
make sure that each ad copy is identical to each other for a
From what I have read, the best book on the topic of proper
pricing is Ken Evoy's "Make Your Price Sell." Ken covers all
the aspects of properly pricing your product or service in a
step-by-step manner. This is the only ebook that I have come
across that even covers this topic.
Copyright © Gauher Chaudhry, All Rights Reserved.
Gauher Chaudhry is editor of Cool Cash Ezine. You can subscribe by sending
an email to email@example.com with "sub-art" in the subject.
Join Gauher's two-tier affiliate program by promoting his latest book "EZ Money
With Ezines." Gauher teaches individuals how to make thousands of dollars in
the ezine publishing business! http://www.ezmoneywithezines.com
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