The first step is to understand your costs. For manufacturing, it can be calculated using unit economics. Pricing for Services must be provided following the resources available at what cost.  Also, what is the value you are offering? You can add a markup premium if the quality of the service or product is superior and at par with the best. Always compare your prices to what other competitors are providing and at what commercials. Test your pricing on a small group of clients to understand their actions. Remember that it is difficult to lower the price if it has been set higher, but it is easier to raise the price once you have gained traction.

One thing i learned from my experience is "Cost is reality .. rest is a perception" To grow you must know your reality. when you are working on competitive pricing strategy during business expansion, the base of your strategy must starts from ,calculating real cost of your product /solution.

Fundamental duty of any pricing strategy is to develop a clear business case of an opportunity. Knowing your costs provides a foundation for informed decision-making, helping you establish reasonable and sustainable pricing that aligns with your business goals. Understanding your costs is crucial for an effective pricing strategy. It allows you to set prices that cover expenses, ensure profitability, and remain competitive in the market.

Knowing your costs is essential for making informed pricing decisions, optimizing profitability, and ensuring sustainable business growth.

In developing a competitive pricing strategy, understanding your costs is foundational. Through overseeing project bids and estimating in my excavation business, I've learned the importance of accurately calculating both fixed and variable costs. This detailed cost knowledge is crucial for setting prices that cover expenses while ensuring profitability. It's a strategy that has been pivotal in our business expansion and one I advocate for at the "School of Blue Collar." Accurate cost analysis allows for informed pricing decisions, helping us to remain competitive and sustain growth. This approach is essential for any entrepreneur looking to scale their business effectively.

Understanding your value proposition is crucial for effectively communicating the unique benefits of your product or service to your target audience, thereby increasing customer engagement and driving sales.

During pricing strategies know your product's USP, special features and it's value proposition. Evaluate how your offerings is different from competitors and address customer needs or pain points. When you ask for a premium use your value proposition to justify premium pricing or position yourself competitively in the market.

"Value is in the eye of the beholder." What do I mean by this? Your pricing strategy must mirror the unique benefits your product offers. Why does it matter? Because: 1. It ensures prices reflect your product's value. 2. It distinguishes your offer from competitors. 3. It aligns with your brand and market position. How to do it: 1. Define your unique value proposition. 2. Make it clear and relevant to your audience. 3. Price accordingly to demand and differentiation. Pro Tip: Price your product to reflect its unique value and market position, enhancing its appeal.

Understand your value proposition. It defines the unique benefits your offerings bring, setting the foundation for pricing that mirrors the value delivered to your target market. This requires a clear articulation of how your products or services stand out from competitors, ensuring prices reflect both value and brand identity. Adaptability is paramount. Monitor market trends, competitor prices, and customer feedback to adjust your strategy accordingly. A dynamic approach allows you to respond to market changes, maintaining competitiveness and supporting sustainable growth. This balance of value perception and market responsiveness underpins a successful expansion strategy.

Price rarely exists in a vacuum – it's how we communicate value. My time as a pharmacist showed me that two similar medications have vastly different pricing power with patients if one promotes faster recovery, fewer side effects, or an easier dosing regimen. Competitive pricing needs to translate what separates your product from mere commodities – that's where true value lies, and this principle also holds true beyond traditional pharmacy settings.

Important it is to know your competitors and their pricing pattern. Analyzing competitor pricing helps you position your product or service appropriately, whether you aim to be a cost leader, offer premium value, or find a competitive middle ground. Understanding how competitors structure their pricing allows you to make informed decisions, ensuring that your pricing is competitive, attractive to customers, and helps you win the opportunity. Researching your competitors provides you those valuable insights into market dynamics, customer expectations, and reroute your pricing discussions till you win it. All the best.

You need to research and monitor your competitors’ prices regularly and adjust your prices accordingly. You can choose to price your products below, at, or above your competitors’ prices, depending on your business goals and positioning.

Researching your competitors provides valuable insights for refining your business strategy, identifying market gaps, and maintaining a competitive edge in your industry.

"Know your competitors well, but focus on innovating yourself even better." Research your competitors to 1.Identify gaps or opportunities in the market where you can offer competitive pricing while maintaining profitability. 2.Analyzing pricing strategies of competitors offering. 3.Check out for competitor's differentiating factors w.r.t your offerings

In China, competitive research should extend beyond traditional competitors to include potential grey market imports. These grey market activities can operate sophisticated full business systems, including after-sales repair and warranty support. For instance, one of our clients was losing sales to such imports. We assisted them in understanding the comprehensive business system, identifying the foreign distributor supplying products, the after-sales support, and the network of resellers in China. With this understanding, effective actions were taken to stop the practice and mitigate the impact on the brand. In China, there are business processes and legal remedies available to mitigate these issues, even if they are not widely understood.

"Price with purpose, win with wisdom." What do I mean by this? Choosing the right pricing method aligns with your strategic goals and market dynamics. Why does it matter? Because: 1. It balances costs, value, and competition. 2. It caters to customer perception and demand. 3. It sustains differentiation and profitability. How to do it: 1. Evaluate cost-plus, value-based, and competitive pricing. 2. Align pricing with customer value and market conditions. 3. Regularly review and adjust to maintain strategic edge. Pro Tip: Smart pricing decisions drive sustainable business success.

To develop a competitive pricing strategy during expansion, start with a thorough analysis of the market and competitors' prices. Differentiate your offering by adding unique value. Consider using penetration or skimming strategies based on business goals. Adopt a dynamic pricing approach to respond to market changes and consider A/B testing to refine pricing. Maintain transparent communication of the value offered and constantly monitor the market for timely adjustments to your pricing strategy.

Should we focus on cost-plus, value-based, or penetration pricing? While it's tempting to seek a one-size-fits-all answer, I've found flexibility crucial. Early expansion with a new therapy often calls for different pricing than a mature product or when entering a saturated market. Our pricing shouldn't be static, but must adapt to market conditions and where we are in our expansion journey.

Conduct thorough market research to understand competitors' pricing strategies. Set competitive prices that offer value to customers while ensuring profitability. Consider offering discounts or promotions to attract new customers during expansion. Monitor competitors' pricing changes and adjust your strategy accordingly. Continuously assess customer feedback and market trends to refine your pricing strategy for optimal competitiveness.

"Price as a journey, not a destination." What do I mean by this? Testing and optimizing prices is crucial for adjusting to market responses and achieving business goals. Why does it matter? Because: 1. It evaluates price impact on sales and satisfaction. 2. It employs A/B testing and analytics for informed decisions. 3. It adapts to feedback and trends for continuous improvement. How to do it: 1. Implement testing methods to gauge price performance. 2. Analyze results to identify optimization opportunities. 3. Adjust pricing strategies based on insights and market dynamics. Pro Tip: Continuous price optimization enhances competitiveness and growth.

Equally important is that prices need to be adjusted over time for various reasons, such as rising costs of raw materials, changes in the supply chain, or inflation. A common strategy is to pass on these cost increases downstream, but this is not ideal because, according to the law of demand, it lowers the demand and therefore total revenue. Microeconomics recommends estimating the demand function and finding the price elasticity of demand, which may allow for some adjustment if the demand is inelastic.