From the course: Pricing Strategy Explained

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Choosing a pricing model

Choosing a pricing model

From the course: Pricing Strategy Explained

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Choosing a pricing model

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- Now I want to walk you through picking the best model for your business. Is it cost based, is it market based or is it value based? I'm going to ask you a couple of series of questions and we'll begin to understand this and we'll apply it to the model in just a moment. So, first, competition. How competitive is your industry? How competitive is your market? Are you first to market? Are you first of a kind? That's going to tell you what model that you should apply to. Secondly is margins. Do you have high margins in the industry? Are you above 70%? Or, are you actually below 50% and you have low margins? Where your margins sit, will also help you determine which model that you should use. Next is the uniqueness of your product or service. How unique is your product? Is there some differentiation in the product or service that you're offering to the marketplace? How about value? How much extra value are creating for…

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