The price we charge customers for our products and services is a lot less elastic than we think – that is, as we raise prices, we lose a lot less customers than we fear. If you build value in your product, people will buy it within a large price range (unless, of course, you are selling a commodity and product differentiation is difficult).Selling at a high “value price” will ensure you have bigger sales and hopefully more profit.
In general, we all charge too little for the products we sell since many of us often don’t value our own product or service as much as the market. Low or lowering prices are the lazy person’s marketing strategy.
Many of us are also afraid of rejection so we think a lower price will yield more sales and less rejection. Not always!
Many times, higher prices are a sign of value. There have been studies showing that when customers pay more for something, they tend to value it more. At Walgreens or Jewel – even though generics are available for many items – the branded products still sell well even though they’re essentially the same thing.
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