I have developed a new product for the home landscaping industry. This
is really something different so I have no comparisons. I know what
kind of profit I would like to see, but how do I know if I have priced
the product correctly. Are there any guidelines for pricing a new
product? Taking into account that I will be looking for at least some
funding, do I need to show a specific GPM? What do lending
institutions look for? |
Request for Question Clarification by
cynthia-ga
on
24 Jul 2006 14:14 PDT
You need to test market your product. The standard methodology is to
price it at three different prices and market to the same
demographics. Then, select the price that gets the most response. Many
times, the final price of a product has nothing to do with the cost to
develop, manufacture and market, it's what the public "wants" to pay.
It's perceived value, not actual value.
Price #1) Seems too low to you, but is at a minimum it takes to break
even and pad in a fair profit.
Price #2) Seems about right, more profit and a cushion for marketing
more aggressively.
Price #3) Seems high to you, very profitable margin here. Many
products are priced at this level.
My Father, a wise marketing genious, once told me this:
..."If 1/3 of your customers don't tell you --the price is too high--,
then your price is too low..."
Shoot for that 1/3, and do the test marketing plan.
If this concept seems logical to you, I can look for details about
test marketing for you, as your official answer.
~~Cynthia
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Clarification of Question by
mhibbs-ga
on
24 Jul 2006 15:13 PDT
Cynthia,
Yes, please provide info. on test marketing.
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Clarification of Question by
mhibbs-ga
on
26 Jul 2006 09:37 PDT
Any information on test marking yet?
|
Request for Question Clarification by
cynthia-ga
on
26 Jul 2006 10:24 PDT
I have done some preliminary searching and have a text file started,
but nowhere near done with my research. I'm in the middle of helping
this customer: http://answers.google.com/answers/threadview?id=749174
--as soon as I'm done I'll finish your question.
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Request for Question Clarification by
cynthia-ga
on
26 Jul 2006 10:24 PDT
Sorry about the link, it't here:
http://answers.google.com/answers/threadview?id=749174
|
Clarification of Question by
mhibbs-ga
on
04 Aug 2006 12:09 PDT
Still no reply to test marketinf info.?
|
Request for Question Clarification by
cynthia-ga
on
04 Aug 2006 19:12 PDT
Been very busy, won't have much time till after this Sunday.
|
Clarification of Question by
mhibbs-ga
on
08 Aug 2006 12:37 PDT
Still waiting!
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