When sales fall, changing prices and holding discounts and promotions is usually the first step companies take, but it is often done without considering the possible consequences.
In his article on pricing strategies in times of crisis, the expert in price management, Ariel Baños, explains the reasons why lowering prices is not always the best solution in a scenario of slowing sales.
The challenge in defining the most appropriate pricing system for each company is to identify what value the products and services sold have for each customer.
The founder of Fijaciondeprecios.com, Ariel Baños, explains the key elements for determining how companies should establish prices for their products and services.Baños notes, "...The price should be related to the value for each client ", but the complexity is in being clear about that value, since" ...When we buy something in general we are not completely sure of the results we will get when using it."
How do companies that permanently use large discounts and offers sustain their strategy?
In his analysis of setting prices, Ariel Baños, an expert on the subject, explains the elements that companies should take into account when offering discounts and promotions to their customers, warning how the cost assumed when providing a discount must be "shared", what kind of promotions should be avoided, depending on the business, and what limits should be established on the number of items that can be part of the discount strategy, among other things.
The practice of trying to get a discount is acceptable in some places, while in others, depending on the product or service in question, it can lead to doubts and harm negotiations.
Ariel Baños, expert in defining pricing strategies, explains that when negotiating a reduction or increase in a price, one must take into account the cultural factors of each country, which can differ greatly from one place to another. "...In some countries, such as Egypt, Morocco and India, and in Southeast Asia in general, it is common to negotiate prices on all types of products and services. It can even be considered offensive if the client pays the initial price, without even making an attempt to get some money off."
Controlling and professionally establishing the price of what is sold is essential for a company in order to be successful and obtain an adequate return.
Ariel Baños, founding economist of Fijaciondeprecios.com, presents 10 essential actions to ensure proper management of the prices of what a company sells.
For the seventh time since 2014 the Varela administration has extended the measure that regulates the maximum retail prices of 22 products in the basic basket, up until July 2018.
From a statement issued by the Presidency of Panama:
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.
The end of the year is a good moment to take stock of a company's pricing strategy and assess possible changes.
Ariel Baños, specialist inpricemanagement, explains the main steps to follow in order to successfully define the most appropriate pricing strategy for every organization.
Estimating the price a client would pay for a product first, and then aligning production and investment costs to that value, is the premise of the Price-led costing strategy.
Ariel Baños, a specialist inpricemanagement, explains that knowing in advance how much you can charge for a product or service, or at least having an estimate, is a key element of the Price-Led costing strategy.
"Showrooming is when a consumer does some research before buying a product, physically going to a store, where they can touch, try out and get advise about the object they are interested in, but in the end they buy it on online where the price is more attractive."
From an article by Ariel Baños, economist and founder of Fijaciondeprecios.com:
The measure, which initially was to last for only six months, was extended until December 2017, meaning that price controls on 22 products in the basic basket will have been in place for a total of three years.
Some of the 22 products whose prices have been regulated since July 2014 are eggs, chicken, potatoes, macaroni and pork chops, among others.
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