How to Set Prices in 2018

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.

Friday, December 15, 2017

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.

"... I will plan the price adjustments so as not to lose profitability in the face of projected inflation and the exchange rate.  Avoiding price increases or delaying them, when costs are going up, can lead to a deterioration in profitability that will not be easy to recover from later on.

  1. I will measure the results of offers and promotions, before and after their implementation, in order to avoid unpleasant surprises in the economic results. Selling more does not always mean earning more. 
  2. I will define a transparent and professional pricing and discount strategy. I can charge different prices without falling into manipulations, or subjectivities. Charging according to the face value is not an option when it comes to prices.
  3.  I will grant discounts on prices, but always in exchange for "something": greater volume of purchase ("Buy 5 for the cost of 4"), specific time of purchase (Black Friday), advanced orders, economic product line, use of a coupon or special card, purchase via a certain sales channels (Internet / Outlet), etc.
  4.  I will avoid competing only on price, in order to avoid falling into "price wars". If I can clearly demonstrate to my client the differential value of my proposal, price will cease to be an obstacle to the sale."

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