Products can be categorized into three – stand-alone, supplementary and complementary. Stand-alone products are those, which are purchased and consumed independently. For example, a wall calendar will be a stand-alone product. Complementary products are those which are consumed in pair – a razor blade always goes with the razor system. Finally, supplementary products are those, which are substitutable – one…
Earlier I had written about two different pricing methods – traditional mark up pricing and perceived value pricing method. Third popular method of pricing is called value pricing. Value pricing works on simple principles. It assumes that the price of a product should be in coherence with the value delivered by the product to end user. This way, value pricing…
A recent survey by American Express found that 42 percent of small businesses have reduced their energy use, and only 29 percent have passed along the higher fuel costs to customers. Just a year ago, 29 percent of the survey’s respondents reduced energy use and 31 percent raised prices to make up for higher fuel costs. The survey also found…
Marketing corporations of late, have started following new pricing methods to perfection. Although these so-called new methods had been evolved couple of decades back, their total integration into modern day marketing warfare is a recent phenomenon. These methods, in contrast to traditional methods, are riskier. One of the most popular new methods of pricing is ‘perceived value pricing’. Perceived value…
Sometimes using the right word may seem like a matter of semantics or of splitting hairs. However, when it comes to drafting a business contract, selecting the right word and meaning, can make a world of difference. Here are just a few of the more commonly misused or confused words used in business contracts. Affect: To alter, influence, or change…
One of the biggest dilemmas faced by business owners is about setting prices of their products. There are many methods helping the business owner arrive at a price point. Traditional method of setting product price is cost plus or mark up pricing method. It is simple to understand and easy to compute – you purchase the product for X amount,…
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