Price determination – Profit and other contributing factors

If you are in retail or reselling business, setting price is not a concern, but if you are the manufacturer or producer, or if you are going to provide some sort of services then setting price can be a very difficult job. At times, new startups set prices in a hurry and focus more on making sales, only to find later that even though they’ve made good enough sales, the accumulated profit is not up to the mark. That is why when setting prices; you need to keep each and every cost in mind, along with adjusting the variables like competitor’s price and consumer’s purchasing power into the price. A price too low would bring more sales but no profits, whereas a price too high will bring large profits but very few sales (unless you enjoy some sort of monopoly). Therefore, the price needs to be spot on.

Rule of thumb when setting prices:

Try to kill your competition by setting low price, but make sure you are not choking your own business of profits. Whatever pricing model you use for pricing your products or services just remember this one point; you’ve got to set a price that will give you an edge over your competitor, still providing you with much needed cash to cover your costs while earning some profits. One more thing, the price you set initially is not something written on stone, it can be changed and it should be changed if the initial price doesn’t prove to be the right one for any reason.

Costs & Expenses:

The price should cover the cost of production and advertisement, that’s simple and everybody knows that. Where most businesses go wrong is when they are calculating their costs of doing business, they often overlook the possibility of some future expenses or completely ignore one or two indirect expenses (transportation & depreciation, etc). Therefore, before you start calculating the right price, you must be having an idea of all costs or expenses that will occur in course of business.

Different Prices for Different stages:

If you are just starting, your first goal must be to enter the market and capture as much market share as you can. At this point of time, you probably need a price as low as possible; some businesses even take a risk of setting a price lower than their break-even point. However, once you’ve managed to make inroads, you can raise your price, later when you’ve established as a well known brand, you can always set a price that offers maximum profits.

Source:
Computers Wholesale Suppliers

Winning combination of internet and B2B marketing

Though business to business transactions have been there for ages, B2B marketing is a relatively new phenomenon (or perhaps marketing was not classified into separate categories like B2C, B2B, and B2G back then). Ever since the categorization, business marketing has surpassed the traditional "consumer marketing" by all measures, that too in this short time period. Business marketing is now established as a much bigger and more profitable venture, particularly in the developed countries. Basic difference between these two, as evident by the names is that in B2C marketing we target individual consumers, while in B2B marketing our aim is to engage businesses, organizations and large corporations. Business marketing is undoubtedly a tough job, but far more profitable without any doubt. Mainly, for following reasons …

• The profit margin is much larger than consumer marketing
• You don't have to cope with the cut-throat competition that exists in consumer marketing
• Business marketing is not unpredictable and complicated when compared to consumer marketing
• Once secured, the customer (i.e. a business) stays with you for a much longer period
• Customer acquisition cost is lower when weighed against the income that generates as a result

Internet and B2B Marketing:
From positioning to promotion, and sales to customer support service, Internet has revolutionized the B2B marketing, B2B marketing and Internet make an excellent duo that is cost-effective, far reaching and equally promising. Ignoring internet as a marketing medium altogether, can prove to be a suicidal decision if you are running a B2B business.

Low cost:
If you are looking to cut down costs for research studies, promotional campaigns, lead generation or even branding, internet is the most economical medium to carry out all these tasks, and the fact that most of online marketing techniques may draw in only the targeted customers, makes it even more worthwhile.

Cementing your relations with the customers:
Social media networks e.g. Facebook or LinkedIn enables your customers to interact and get the answers to their queries (regarding your business or products) in no time. Corporate Blog is an excellent way to establish yourself as an experienced professional; you can elaborate your business mission, share your knowledge of the industry, and get immediate feedback. Similarly, you can provide your customers with an expeditious customer support service at absolutely no cost involved.

Online B2B marketing platforms:
Luckily, internet offers various types of B2B marketing platforms and business networks, which mean you've got a pool of interested buyers readily available. These networks (e.g. dailytrader.com) can take the fuss out of B2B marketing and give an instant boost to your sales.

Source:
Wholesale