• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Element 7. Compelling Pricing Possible > Where to Find This Answer

Where to Find This Answer

Compare your expected unit costs with the price of the competitor’s product. If you can foresee that your costs will be significantly lower than the offering price of your competitor, perhaps you have an advantage. Naturally you cannot know for certain until you have actually calculated your unit costs including all variable and fixed. Note too that it is the ancillaries market where this element can be quite vivid. Watch for savings in these closely associated ancillary products or services such as insurance, warehousing, distribution, or other costs required to twist existing substitutes into compliance with the compelling needs of the customer. If your product does not need these expensive add-ons, you could have a significant advantage worth touting now. For example, your pricing could become compelling if you could deliver motion pictures without installing the expensive wires necessary to deliver cable TV to the home.

Dr. Market’s Observation:

This is yet another area where a competent and aggressive management team will earn its keep for investors. They will want to know whether you and your team can hold down costs so that the market flows naturally in your direction with plenty of margins to make this opportunity worth the investment risk.



PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint