Once you have identified consumers, located a retail outlet and completed test marketing, you need to determine the selling price for your product. Price is the primary means of generating income and profits for your business.
There are three major factors to consider in setting your price. The price must cover the cost of producing and marketing your product. It must be at a price that the buyer is willing to pay for the product. And the price offered by competitors will influence the price you pick. Setting your Price will help you through the process of setting a price for your product.
Food Retailers' Pricing and Market Strategies, with Implications for Producers research paper examines grocery retailers' ability to influence prices charged to consumers and paid to suppliers. They discuss the impacts of aspects of retailer behavior on the upstream farm sector.
For more information on this topic, see the links listed below of articles posted on related Web sites.
- Commodity Busters: Be a Price Maker, Not a Price Taker – HBS Working Knowledge -- Too many businesses are price takers, not price makers. That means they are willing to lower prices to capture market share or to sign up a marquee customer. Don't let your ego get in the way of good business sense. Here are seven steps toward naming your own price.
- Is Performance-Based Pricing the Right Price for You? – HBS Working Knowledge -- Not every industry or company can benefit from performance-based pricing. But where there is a fit, PBP can be a powerful tool that merges the interests of buyers and sellers.
- Use the Psychology of Pricing to Keep Customers Returning - HBS Working Knowledge -- When to charge for a product or service can be more important than how much to charge. If you want to build long-term loyalty with customers, you better understand the difference.
- Selecting an Appropriate Pricing Strategy - University of Missouri -- The focus of this publication is the selection of an appropriate pricing strategy for value-added agricultural products.
Revised May, 2019.