Page 57 - Duct Tape Marketing

41Chapter 3: Seeing Your Product through Your Customers’ Eyes

Table 3-2 Price Sensitivity Factors

Price Matters Less if Products Are: Price Matters More if Products Are:

Hard to come by Readily available

Purchased rarely Purchased frequently

Essential Nonessential

Hard to substitute Easy to substitute

Hard to evaluate and compare Easy to evaluate and compare

Wanted or needed immediately Easy to put off purchasing until later

Emotionally sensitive Emotion-free

One-of-a-kind A dime a dozen

Pricing considerations

Give your prices an annual checkup. Here are the factors to consider and the
corresponding questions to ask:

ߜ Your price level: What is the perceived value of this product compared
with its price? What are the prices of competitive products? How easily
can the customer find a substitute — or choose not to buy at all? (See
Chapter 4.)

ߜ Your pricing structure: How do you price for extra features/benefits?
What features/benefits do you include at no extra charge? What promo-
tions, discounts, rebates, or incentives do you offer? Do you offer quan-
tity discounts?

ߜ Pricing timetable: How often do you change your pricing? How often do
your competitors change their pricing? Do you anticipate competitive
actions or market shifts that will affect your pricing? Do you expect your
costs to affect your prices in the near future? Are there looming market
changes or buyer taste changes you need to consider?

Presenting prices

The way you present your prices can either inspire your prospects — or con-
fuse or underwhelm them. Use Table 3-3 and the following list to show your
prices in the most favorable light: