Prices: Intelligent Strategies to Improve Profitability

Applying segmentation techniques, making comparisons with the prices of other products, and applying discounts to customers who have eco-friendly practices are some of the strategies that can help maximize the sales profitability.

Friday, June 7, 2019

Ariel Baños, a price management specialist and founder of Fijciondeprecicios.com, explains how simple techniques completely applicable to any business can be turned into intelligent and creative pricing strategies to maximize profitability.

The ultra-segmentation era. The application of price segmentation techniques in the sale of entry tickets helps to achieve maximum profitability and can be divided as follows:
-Segmentation by sales channel: Full price at the box office and on-line discounts.
-Segmentation by product lines: Service package options at different prices.

Smart comparisons. Prices are neither expensive nor cheap by themselves, it all depends on what our reference is. A comparison of product prices should be made, based on similar but more expensive products, to show how much the consumer can save.

Ecological prices. Taking care of the planet and behaving in an environmentally friendly way cannot just be a matter of individual will or education. A smart pricing scheme can provide the right signals for consumers to behave "eco-friendly.”

The single-price model in action. The "single-price" or " unique price" model consists of selling the whole range of products (or almost all) of a company at the same price. These are usually remarkably low prices. The objective is to trade a product at a low price and sell the complementary good to a higher one, where a good profit margin can be obtained.

Premium brands. The distinctive brands, most of which are the product of good positioning, can be sold at prices that double or triple the other goods offered in the market.

See full publication at Fijaciondeprecios.com

More on this topic

Keys to Stop Competing for Price

April 2019

Identifying a segment that values the differentials of the product or service and charging a price aligned with the company's strategy are essential to avoid competing with the lowest prices in the market.

Ariel Baños, specialist in price management and founder of Fijaciondeprecios.com, explains how through the implementation of an appropriate strategy, it is possible to compete in a market where there are suppliers who charge derisory prices.

Prices: Sell Less with Greater Profitability

February 2019

The carrot strategy is to implement the right incentives for everyone to be committed to the same goal: the culture of profitability.

Ariel Baños, price management specialist and founder of Fijciondeprecios.com, explains how through the "carrot strategy", companies can move from the "culture of volume" to the "culture of profitability."

Prices: The Myth of the Ideal Margin

August 2018

The search for the ideal margin is an aim that keeps a lot of business owners up late at night, but this kind of reasoning does not always help them be more profitable.

In general, those who ask themselves what price they should set for their product, start from an incorrect premise: using the cost as a starting point. 

How to Set Prices in 2018

December 2017

Planning adjustments to avoid the loss of profitability and redefining discount policies are some of the goals that companies should consider when deciding on their pricing strategy for the new year.

The last weeks of December are generally a good time to evaluate the results of the strategy implemented throughout the year that is ending, and to reevaluate plans for next year. Ariel Baños, a specialist in price management, recommends that companies commit to five principles in order to get the information needed to decide on plans for next year.

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