Internet Marketing - Hidden Prices
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Many marketers, especially on the Internet, do not display the prices of their products clearly. They think that if the customers are truly interested in their products they would try to contact them directly. When they do call asking about the prices, they feel that the customers are in their grasp. However, this strategy can also backfire since the Internet is such a wide source that it is easy to divert from one website to the next. If the prices are not displayed in big, bold letters, the customers are bound to click away and never return.
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There are various effective ways of pricing your products. The primary goal of any business venture is to make profit. Before fixing your prices, you must realize your product's market, competition and distribution costs. Remember, the marketplace responds fast to international competition and technological advances. You must keep abreast of the factors that influence pricing, and be prepared to adjust.
A common practice is the use of the manufacturer’s retail price. Though it is convenient, it can undeservingly create a price image without considering competition. Prices need to be compared and determined after ascertaining a competitive position. Use of cost-effective means to promote the merchandise and the business can work wonders to put a price lower than the competition. Sometimes, however, the strategy of pricing above competition can raise the status of a product. In addition, if the product can be customized, a variety offered, and other related services are of good quality, then some customers do not hesitate to pay more.
Another strategy, price lining, too has its advantages. It reduces errors by sales personnel in pricing, simplicity of choice for customers, reduces inventory and reduces storage costs. Multiple unit pricing is a useful for low-cost, consumable products like shampoo or toothpaste.
Pricing has to be done by keeping the service costs in mind. By analyzing the cost of each service, prices can be set to maximize profits and eliminate unprofitable services. Material costs, labor costs and overhead costs make up the total cost of any product or service. For consultant services, contract or hourly fees must be set high enough to cover operating expense during slow periods.
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