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Pricing iQ

Should we raise the price or not?

Deciding whether or not to increase the price of a particular product or service in a particular market often seems to be more of an art than a science.

It involves more than calculating the costs or estimating the price elasticity of demand. The price sensitivity of your customers and their ability to switch suppliers is important. The attitude of your competitors and distributors is important too. One must also carefully assess the degree of risk of losing revenue and profit.

The Pricing iQ iPad app helps you or a business team assess the case for increasing the price of a particular product in a specific market that will assist managers come to a shared understanding and agreement on what should be done.

The issues it covers include:

Price Sensitivity

This includes consideration of customer familiarity with the product, their wealth and the proportion of their total costs this product accounts for.

Price Leadership

This includes market share and the nature of the competition.

Attitude of Distributors

This also includes market share and the nature of the competition.

Risk from lost business

This includes your possible loss of your profit from this product in this market (which is reduced if your costs go up) and also the current supply position. If supply is tight, then you have less risk in raising prices.

Click here for details of the Pricing iQ iPad app.

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