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

Hone your skills to provide better customer service on phone

If you’ve got the experience of calling some company’s helpline and talking to their representatives, you must be having an idea of the difference that the person on the other side of the telephone line can make. Some representatives are able to make a positive impression even before the actual conversation take place. Research shows that a good percentage of angry customers skipped the idea of getting rude and using foul language, just because the person who received the call sounds too polite and erudite. We can safely assume that a big majority of these customers must have skipped the idea of bad mouthing that particular business in front of their friends, as well.

On the contrary, some representatives take pleasure in poking fun at customers and making them feel sorry for even thinking about complaining or making an inquiry. Sometimes it can be due to insufficient training or little or no check over your CSR. Sometimes little things like advising them to call to another number or sending an email to some specific address can prove to be a big enough turnoff (ideally it should be the customer service representative who’ll forward their complains to the concerned department). At times the prospective customer calls a new business and upon hearing a somewhat discourteous greeting, the first thing that comes to his/her mind is “if hiring their services means hearing such displeasing response more often, then there’s no way I m getting into business with these fellows”.

Your customer service staff needs to be au fait with the main idea that they are there for customer’s service. What a “shocking revelation” Mr. writer, you must be thinking, but this obvious point is ignored by customer service staff quite often. CSR people are there to serve the customers, not for giving short answers to their questions and hanging up the phone instantly or take another call. However, it’s not always the customer service staff that makes this mistake, sometimes business owners are themselves the culprits, without even noticing it. If you are a small business and you don’t have the need or resources to hire specialized staff, you must hone your skills to give a better impression.

You don’t necessarily need to join some crash course of improving your telephonic conversation; some mock calls with your family members or friends can give you plenty of advice to work on. All you need is to ask them to comment on your voice quality, selection of words and convincing techniques.

Source:
UK Wholesale Suppliers, Distributors, Dropshippers & Manufacturers
Computers Wholesale Suppliers

Social group influence on buyer’s behavior

It is the customer, who makes the decision of buying something, right? But how does he/she reach to that decision? There's a complete procedure and different stages to this decision and as a marketer, you must know the process. For the reason that you are not going to win a customer unless you are well in terms with the factors that influence the buying behavior. Generally, the process starts from the moment a customer feels the need of a particular product (or service), next step is to look for different options available, after weighing up these options, the customer then reaches on a final decision to pay for one of these options.

Very few customers are capable of making an entirely independent and rational decision, without getting influenced by any of the external factors. One of the most important factors is the social influence, which plays a very important role in a customer purchase decision. Let’s have a look at how these social influences can affect the buying behavior.

Family Buying Behavior:
Among all social groups, family of course is the closest, hence the most influential. Knowing the answers to the questions like … who in the family is going to make the final buying decision, or who is going to pay the bill, can help a lot. Because even if your product has got nothing to do with parents, and is mainly intended for the children use. It is actually the parents who are going to pay the bill, therefore you are supposed to market the product from parent’s perspective and not of children (unless the product is some inexpensive toy or candy that the child can purchase from their pocket money).

Social Class:
Society is normally divided in three classes by sociologists, namely upper class, middle class and lower class. Some divide it in further sets like upper-middle or lower-lower classes. All of these classes have their own characteristics, social values, set of needs and spending patterns. Obviously, the buying behavior is going to be different for people belonging to any of these classes, you need to address the right set of needs when marketing for a specific class of society.

Cultural Influence:
American, European, Indian, Chinese … all of these cultures are poles apart when it comes to the people’s needs and preferences, who are a part of some specific culture. Your marketing tactics should be strictly in line with these cultures and their moral values.

Source:
Wholesale
Wholesale Suppliers

Total quality management and its building blocks

"Total Quality Management", the title is almost self-explanatory; still a brief definition of TQM by "International Organization for Standardization (ISO)" will help you in coming to terms with this system. It states, "TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society". Although, such exemplary business models that act in accordance with all these requirements (especially the last one about society) are hard to find, but this all-inclusive business standard (known to be a product of Japanese industry) is worth putting into practice. First because it calls for an equal level of dedication and contribution from all levels and departments of organization, second because it focuses on quality and third and the most critical, it lays emphasis on customer.

It starts with customer & end on consumer:
Total Quality Management approach has the customer on the top priority for all business decisions. It presents "customer satisfaction" as the key to the "long term success". Many times businesses are carried away by some glamorous product coming from their competitors, or a low-cost alternative, while compromising on customer requirements. "Total Quality Management" theory lays emphasis on making products or services with customer satisfaction in mind, not your personal preferences, not the competitors, not anything else, nothing, nada, zip.

Quality:
Literally, the word means a set of standards while in business language a product is a quality product if it provides your customer more than what he/she was actually anticipating (usability and durability vise), for the given price. Nowadays, there's so much competition that you should not be offering anything at all if the product you are offering is not a quality product. Apart from the product, your customer support should be of excellent quality as well.

"Total" is for "team effort":
In the set of guidelines known as "Total quality management", the word "total" symbolizes team work. As a business, you'd not be able to come up with a quality product unless all departments of your company are not into it. Total quality management is not only for manufacturing department or for marketing section or purely for upper level management; you need to get each and everyone on board. Define the tasks for everyone; make them realize their significance and the contribution they can make towards company's success. Leader's function become much more significant, supervisors and managers should be leading from the front.

Source:
Wholesale

Choosing the right bank for international trade

International exporters need the services of banks or financial institutions at many stages of their trading business. They need loan to help with initial setup, they need financing for production phase, and they need the services of banks to make or receive payments (letter of credit, wire transfer, etc), they can avail lots of other services like online banking, small business loans, credit cards, etc. When deciding on your bank you should consider following points carefully, because you can't keep changing your bank often.

Interest Rates and Service Fee:

Normally, there’s not much difference between interest rates offered by various banks operating in the same market and circumstances, mainly because of cut throat competition. However, that doesn’t mean you should completely ignore the small differences at hand. Similarly, banks charge different fees for different services, if you have a clear idea of the services you are going to avail, you can easily decide on the most suitable bank. Banks have to rely on these service charges and fees for their profits, but you must make sure that you are not getting ripped off by your personal bank.

Repute & History:

A well reputed bank of good standing will also speak for your business credibility at international export, so you better go for some bank, which is highly regarded among business circles. If you are choosing a bank for long term relations, you should go through its business history, past performance and achievements. Another question to go over is how financially strong that bank is, especially after we have seen more than 15 US banks failures in first three months of 2009. Just because they deal in money, doesn’t mean they’d never run out of it.


Customer Relations & Customer Service:

Good banker-customer relations are a result of mutual understanding and collaboration. Bank staff normally consists of well mannered and courteous individuals; still some banks go that extra mile to please their customers and establish long term relationships. Customer service can slightly vary on branch to branch basis as well. Don’t get overwhelmed by the politeness and the display of utmost sincerity when going through the procedures of opening an account, instead you should talk to some existing customers to make sure they are satisfied with the banking services and the behavior of staff.

In addition to the points described above, you can look for the quality of products and services offered by the bank.