Establish a coherent pricing strategy for your business
Well-prepared business professionals should assess their company’s performance and goals while attending to four main elements: product, price, place, and promotion. Price is a key part of this, and business professionals need to develop a robust and clear pricing strategy. Pricing strategies consider aspects such as market conditions, competitor actions, consumer finances, production costs, and distribution costs. Analyzing all this data and turning it into a well-rounded strategy is no easy feat, but an MBA in marketing will grant the skills and knowledge required. Read on to find out more.
Situating the determination of price points within a coherent, intentional strategy is essential to ensure the success of a business. This strategy should be set by considering a broader picture of the financial and economic environment, and the place of the business within it. A thorough market pricing analysis should be undertaken to ground the strategy. This should consider things such as client demographics, existing competition and their strategies, and other relevant social and economic factors.
Another aspect of pricing strategy that should be considered is not external, but internal. Different business goals will align with different kinds of strategies. It doesn’t make sense for a company without a firmly established brand image to use the same pricing strategy as a renowned, acclaimed corporation. Professionals should determine their business goals, considering things such as cash flow, market penetration or market share, and intention.
An MBA in marketing will prepare business professionals for the development of a pricing strategy. For newly established businesses, one such strategy would be pricing for market penetration. This intends to set prices lower than competitors as a means to attract new clients. For the introduction of new products or services into the market, price skimming is another potential strategy to use. This involves setting high price points during the initial phase of a product, then gradually lowering it as competitors appear. Another pricing strategy is known as premium pricing. This strategy is only useful when businesses control products or services without any competition and involves setting a high price point. Lastly, an important strategy is value pricing. This is useful during times of economic recession, or when competition is insurmountable. It involves setting a low price point and taking a loss as a form of harm reduction.
An MBA program specializing in marketing can prepare business professionals to effectively develop pricing strategies uniquely suited to their circumstances. Within an MBA in marketing program, students become well-versed in topics such as marketing analytics and trend spotting. As a student in these programs, they have the opportunity to engage with established and innovative entrepreneurs, executives, and consultants and learn first-hand how to assess their market environment.
Within these programs, students become educated in creating and assessing data-based statistical models that allow them to analyze demand much more accurately. Using this knowledge, they will be able to develop effective pricing strategies and contributed to their business in a lucrative, successful manner.
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