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What’s your pricing strategy?
Session 6
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What have you learned about feasibility planning?
Think of two new things you have learned about feasibility planning in the course.
Take turns telling your group members. Decide who will write, and who will report back
to the group If your idea is the same as the person before
you, think of something different
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Muffin activity
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Explore how prices are set in the market Choose a pricing strategy for your
business Complete your initial sales forecast
Session objectives
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What is a strategy? What skills are important in strategy?
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Strategy: a plan, method or series of moves to reach a
goal E.g. hockey strategy, business strategy,
marketing strategy, pricing strategy, etc.
Strategy: Definition
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Decision-making skills+ strategy + hard workCan win the game
The right strategy can give you an edge over the competition
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= Research + math + psychology + experience
The right price
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The 3 C’s Market perception Cost plus
Three tools to help you set your price
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Pri
ce
Who decides?
Maximum
Minimum
Other options
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Minimum
Other options
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Your Cost
Other options
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Your Cost
YourCompetition
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Your Cost
YourCompetition
What happens here?
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Your Cost
YourCompetition
Price too high, nobody will buy
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Your Cost
YourCompetition
Price too high, nobody will buy
What happens here?
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Your Cost
YourCompetition
Price too high, nobody will buy
Price too low, you’ll lose money
Tool #1: The 3 C’s
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Pri
ce
Who decides?
Customer
Your Cost
YourCompetition
Price too high, nobody will buy
Price too low, you’ll lose money
Select a group of competitors that match your product/service (it may be all the competitors)
Tool #1: The 3 C’s
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Pri
ce
Price too high, nobody will buy
Price too low, you’ll lose money
Think about where you would like your price point to be: in the middle, higher or lower
Your product/service
?
?
?
Tool #1: The 3 C’s
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Pri
ce
Price too high, nobody will buy
Price too low, you’ll lose money
Select a price for your product/service. You will use this price as your assumption going forward.
Your product/service
?
?
?
Tool #1: The 3 C’s
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What does market perception mean? How do you want your price to compare
with other products/services with similar features and quality?
ACTIVITY: Four market perception strategies
Tool #2: Market Perception
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Get into table groups Read the four strategies on p. 8. Read about the three businesses on p. 9 Answer these questions:
What strategy is the business owner using? Why?
Activity: market perception
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Cost plus = costs to produce a product/service + markup (%)
Markup: amount added to cover expenses and allow for a profit
E.g. 10% markup, 15% markup
Tool #3: Cost Plus
