Business & Enterprise

Business & Enterprise

What are some different ways to set the price of a product?

Ask people to pay too much for your product or service and they will stop buying. Ask too little and your profit margin slides or customers assume your product is poor quality. An 'optimum price' factors in all your costs and maximises your margins while remaining attractive to customers. Here's some ideas of how to set your price:

- Know the market: You need to find out how much customers will pay, as well as how much competitors charge. You can then decide whether to match or beat them. Simply matching a price is dangerous, though - you need to be sure all your costs - both direct and indirect - are covered.

-Chose the best pricing technique: Cost-plus pricing involves adding a mark-up percentage to costs; this will vary between products, businesses and sectors. Value-based pricing is determined by how much value your customers attach to your product. Decide what your price strategy is before making a calculation.

-Work out your costs: Include all direct costs, including money spent developing a product or service. Then calculate your variable costs (for supplies and materials, packaging and so on) - the more you make or sell, the higher these will be. Work out what percentage of your fixed costs (over heads such as rents, rates and wages) the product needs to cover. Add all of these costs together and divide by volume to produce a unit break-even figure.

What is a target Market?

A small business's target market is the group of people who it targets with advertising. These people are the consumers who are most likely to use the company's products and services. Marketers use different variables when determining their target markets, including demographics, personal interests and the times in which consumers shop. Target market can vary by size. But a company's target market generally must be large enough to earn a profit.

How can we group people in our target market?

- Look at your current customer base

- Check out your competition

- Analyse your product/service

- Choose specific demographics to target

- Consider the psycho-graphics of your target

- Evaluate your decisions

- Additional resources

How can we find out if people in our target market want to buy our product?

These include gender, age, income levels, race, education, religion, martial status, and geographic location. Consumers that fall into these groups tend to value the same products and services, which is why narrowing down these segments is one of the most important factors to determine target markets.

What are different ways to advertise a product?

Advertising is the lure that draws new customers to your business or product. The trick is to find a form of advertising that fits your business, your budget and your target market. You'll have plenty of options to choose from, as traditional media such as print and new media such as social networks both have their advantages

- Social Media Marketing: Social media platforms are an attractive marketing tool for new businesses, because promoting yourself there has little or no monetary cost. The catch is that you'll need to invest significant time in building a presence, and making your content