Every person, at least once in his life, had to sell something: a product or a service. Price, according to marketing definition, is a monetary expression of the value of a product. However, in order for the sale to take place, it is necessary to justify the price to the buyer and convince him to purchase the product.
Instructions
Step 1
Calculate the cost that each product has. This measure is determined based on the specifics of the product or service. The cost price reflects the costs of the seller for the production, purchase, storage and transportation of the product, it can indicate the amount of work and time costs. The cost also includes the cost of preparing and launching production, the cost of developing technologies, staff salaries, tax deductions, advertising and competition costs.
Step 2
Add benefits. It is a natural fact that no one sells a product at cost. Each seller has a profit or benefit in the cost of the goods. Usually, to determine this financial part, the market price is studied, i.e. the prices of competitors with a similar product are investigated. The advantage for the higher cost of the goods in relation to the market can be the unique characteristics of the products, exclusive conditions, novelty, and higher quality.
Step 3
Include additional metrics. It is advisable to take into account various variable data in justifying the price, such as the coefficient of possible inflation, coefficients of work complexity. Regional price adjustments can also affect the cost.
Step 4
It must be remembered that the purchase of a product or service will take place only when the cost is lower than the value that the buyer will receive with the purchase of the product. Such benefit can be both material and intangible, but in any case, the purchase solves some problems and tasks of the client. Tangible assets can be savings on the purchase, the profit received from the use of the goods in the future. An intangible benefit can be prestige, ease of use, and safety. In any case, you can back up the value justification for the product with value.
