Pricing Products

Pricing is a big deal. It’s not just a simple markup situation, though that is a very common practice. When setting prices for your products, be they good or services, there are a few things to consider.

First of all, do not worry if you are not the lowest price option in the market. Many companies fret over not being the price leader. However, not being the lowest price has significant advantages. Higher prices signify higher perceived quality in consumers’ minds. Think about the outdoor apparel/gear company Patagonia. If you’ve ever priced their items, you know that their prices are sky high. However, this strategy works well for them. It is a signal to the market that they have good quality products. And you won’t find low quality products priced high because they will be “outed” by the market very quickly.

Secondly, and clearly related to the first point, consumers don’t necessarily shop around for the lowest price option. Some do, yes, but many do not. Provide a good product with good value, and you will do fine. Going after that lowest price may lead you to “leave money on the table” with customers. In other words, they might be willing to pay more than what you charge.

Third, higher prices, when coupled with higher unit margins, will allow you to better support your products through better service. This may be crucial to making a sale. Low priced companies tend to have minimal service, if any at all. So being able to provide some service support will work wonders in attracting and keeping business.

There are many other issues to be concerned about when it comes to pricing, including your competitors. Don’t take the practice for granted….it requires more thought that you might think.

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Maranello Consulting is a marketing consulting operation based in Dallas, TX. We have experience in many areas of marketing, including strategy, planning, social media, customer service, data analysis, market research, and marketing troubleshooting. Maranello can also develop and deliver custom corporate training workshops on all things marketing. If you have questions, please do not hesitate to contact us at