There are many variables to consider before determining how much you should sell a #product for.
We’ll tell you about price positioning using the example of wireless earbuds.
Imagine: the manufacturer has its own flagship product ─ elegant, long-lasting, waterproof wireless earbuds with an extra warranty. So how much should it cost?
🌟 ⭐️ Price = Quality Strategy
It’s important to first look at what else is on the market, who produces similar wireless earbuds, and then set the market price.
According to the principle: “expensive means better,” distortions will happen when you:
💫 Put a high price on a low-quality product. Then you will lose #business due to a lack of clients.
💫 Put a low price on a quality product. In that case, you will lose due to low #marginality. You will have a high turnover, but low profits.
Do your wireless earbuds have a fancy design and are long-lasting? According to this strategy, they should be expensive.
🌟 ⭐️ Strategy of “Uniqueness.”
This is when multiple functions and features of a product set it apart from the competition. Take Apple for example, their operating system provides the ability to build an ecosystem of gadgets. Therefore, Apple products are often purchased based on these criteria and the prices set are less connected to the price/quality ratio.
Let’s say none of the #competitors offer an additional warranty for their earbuds, and hardly anyone will be able to offer it. This is an opportunity to create ‘uniqueness’ by offering an additional warranty with your product. It’s important to factor in the potential costs of such a warranty, otherwise it may seriously affect profit margins.⠀
🌟 ⭐️ Price Sensitivity Strategy
When you raise your #price until customers stop buying. Determine the prices that people are willing to pay through tests and gradual changes.
🌟 ⭐️ “Share of the Wallet.”
When you set prices based on a share in a customer’s wallet. For example, you know that the monthly budget of your #customers is on average $3000 / month. And you know that for them, it is not a problem at all to spend $100 on earbuds. If your product is really that good, focus on your wallet share.