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Other Added - How Much Should You Charge?
TV has always been a popular stepping stone on the way to Hollywood stardom. The film industry will always look upon television as the minor leagues, so to speak, a place where talent is harvested, personas invented. As such, the fact that so many Oscar nominees this year got their start in TV is not a surprise. Most acting nominations seemed to come from either former American television actors or foreign actors. This makes the film industry even more like the major leagues. It
So the value of the product has little to do with the cost of production or service. It is the value of the product to the buyer. But it is not enough for you to know the value of the product or service to the buyer. The buyer has to know as well. But it is surprising how often that a buyer really doesn't understand the full value of what they may be buying.
If the buyer does no
Raising capital can be a harrowing affair for most of us, but particularly so for small struggling businesses, disadvantaged groups and those belonging to the rural sector. Often many of these people have done the rounds of the banks and traditional lending institutions only to be turned away because they have not been able to meet their very strict lending criteria. Unfortunately a large number of these people never know that there could be a multitude of grants available to the
The basic principle of pricing is that you should set your prices as high as the market will allow. But what does that mean? (You may not decide to do this for other marketing reasons such as trying to buy customers, or offering an introductory price to encourage people to try a new product or service. But this should be a conscious strategic decision.)
When setting their prices, the single biggest mistake that businesses make is not to understand the value they offer compared with their competitors. So you must understand why your product is better than everyone else's.
Is it stronger? Does it last longer? Is it better designed? Does it look better? If it is a service, what are the superior results you provide? What is the value of such differences to the buyer?
If it is a commodity, then what else are you offering? For example, you can get a $2 fruit snack bar at the service station as you are filling your car. You know you could probably get the exact same bar for 25% less at the supermarket, but you will have to make a special stop, and then you will have to wait in a queue. Its just not worth the 50 cents you will save. You are prepared to pay 50 cents for the convenience of buying the bar now. But if the bar was $5, would you buy it? Well you might if you knew that this service station was the only retail store for 200 miles!
Economists call this decision making "the cost of shoe leather" which is the amount of effort you are prepared to make to find a saving on your purchase.
When you understand the value of what you provide compared with your competitors, and that includes substitutes for your product or service, you can then better set your prices.
So if you product lasts twice as long, could you charge twice as much? Well consider the inconvenience factor of the replacement. If the item was socks, the inconvenience factor might be quite low. But if it was a special valve inside a jet engine, the replacement cost of which was many times the value of the valve, you could probably charge considerably more for the valve than twice the cost of a valve that lasts half as long, particularly if you guaranteed its lifetime.
So the value of the product has little to do with the cost of production or service. It is the value of the product to the buyer. But it is not enough for you to know the value of the product or service to the buyer. The buyer has to know as well. But it is surprising how often that a buyer really doesn't understand the full value of what they may be buying.
If the buyer does not
In the post-quota era, India and China are emerging as the major hubs for global apparel sourcing, mainly to U.S.A. and the European Union.There are several factors which led to this development. The vast size of the Indian textile industry and its competitiveness make it one of the world’s leading apparel exporters. India has vast sources of raw materials. Labor costs are low in India. Indian traders have a wealth of entrepreneurship, designs and experience, which enable
When setting their prices, the single biggest mistake that businesses make is not to understand the value they offer compared with their competitors. So you must understand why your product is better than everyone else's.
Is it stronger? Does it last longer? Is it better designed? Does it look better? If it is a service, what are the superior results you provide? What is the value of such differences to the buyer?
If it is a commodity, then what else are you offering? For example, you can get a $2 fruit snack bar at the service station as you are filling your car. You know you could probably get the exact same bar for 25% less at the supermarket, but you will have to make a special stop, and then you will have to wait in a queue. Its just not worth the 50 cents you will save. You are prepared to pay 50 cents for the convenience of buying the bar now. But if the bar was $5, would you buy it? Well you might if you knew that this service station was the only retail store for 200 miles!
Economists call this decision making "the cost of shoe leather" which is the amount of effort you are prepared to make to find a saving on your purchase.
When you understand the value of what you provide compared with your competitors, and that includes substitutes for your product or service, you can then better set your prices.
So if you product lasts twice as long, could you charge twice as much? Well consider the inconvenience factor of the replacement. If the item was socks, the inconvenience factor might be quite low. But if it was a special valve inside a jet engine, the replacement cost of which was many times the value of the valve, you could probably charge considerably more for the valve than twice the cost of a valve that lasts half as long, particularly if you guaranteed its lifetime.
So the value of the product has little to do with the cost of production or service. It is the value of the product to the buyer. But it is not enough for you to know the value of the product or service to the buyer. The buyer has to know as well. But it is surprising how often that a buyer really doesn't understand the full value of what they may be buying.
If the buyer does no
Deming advocates the use of statistics to control quality by measuring waste and defects in manufacturing. The maintenance of formal procedures is a prerequisite to certification under various quality codes. It goes further than Taylor because computing power simplifies the gathering and processing of data to measure performance against pre-determined standards and against a worker’s peers. As systems become quicker, cleverer and cheaper the use of computing for this area of cont
Economists call this decision making "the cost of shoe leather" which is the amount of effort you are prepared to make to find a saving on your purchase.
When you understand the value of what you provide compared with your competitors, and that includes substitutes for your product or service, you can then better set your prices.
So if you product lasts twice as long, could you charge twice as much? Well consider the inconvenience factor of the replacement. If the item was socks, the inconvenience factor might be quite low. But if it was a special valve inside a jet engine, the replacement cost of which was many times the value of the valve, you could probably charge considerably more for the valve than twice the cost of a valve that lasts half as long, particularly if you guaranteed its lifetime.
So the value of the product has little to do with the cost of production or service. It is the value of the product to the buyer. But it is not enough for you to know the value of the product or service to the buyer. The buyer has to know as well. But it is surprising how often that a buyer really doesn't understand the full value of what they may be buying.
If the buyer does no
Most of us would never even consider eating our lunch in the bathroom, yet we do it all the time in our office. Recent studies show there are more germs in the average office than in the average bathroom! Perhaps that is a good indicator that keeping your office clean is really important.For most office employees, keeping their office clean isn’t something they really have time to make a priority. Can you imagine telling your manager that your report will be late because t
When you understand the value of what you provide compared with your competitors, and that includes substitutes for your product or service, you can then better set your prices.
So if you product lasts twice as long, could you charge twice as much? Well consider the inconvenience factor of the replacement. If the item was socks, the inconvenience factor might be quite low. But if it was a special valve inside a jet engine, the replacement cost of which was many times the value of the valve, you could probably charge considerably more for the valve than twice the cost of a valve that lasts half as long, particularly if you guaranteed its lifetime.
So the value of the product has little to do with the cost of production or service. It is the value of the product to the buyer. But it is not enough for you to know the value of the product or service to the buyer. The buyer has to know as well. But it is surprising how often that a buyer really doesn't understand the full value of what they may be buying.
If the buyer does no
Are you inadvertently driving your customers crazy with your company policies? Not sure?Well, imagine that a customer who's been with your company for a while with no complaints finally has a reason to contact customer service because of what appears to be a billing error. She assumes the error will be corrected quickly and she'll go on her way.Instead, your customer service rep recites a convoluted procedure she'll need to go through to rectify the issue, much to t
So the value of the product has little to do with the cost of production or service. It is the value of the product to the buyer. But it is not enough for you to know the value of the product or service to the buyer. The buyer has to know as well. But it is surprising how often that a buyer really doesn't understand the full value of what they may be buying.
If the buyer does not understand the value of what they are buying, they won't pay what it is worth. If they don't know there is not another retail store for 200 miles, they are unlikely to pay $5 for that snack bar. And the jet engine manufacturer may not understand the maintenance cost implications of a lower quality valve to the end user.
When you know what your product is truly worth, and you have educated the buyer of its value, you will be able to set prices that reflect that value. The maximum value that the buyer will bear- before they will decide they are better off with the lower value product, or the pain.
How do you find this threshold? Trial and error! Start at a price a little above the inferior product, but below a superior one, and keep lifting your prices until your sales conversion factor declines to an unsatisfactory level. If you can't sell it at a price above an inferior product, look closely at your marketing and sales process.
But remember, if you don't understand your value, you will forever be just another commodity seller competing on price.
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