Improve your marketing mix with a strong pricing strategy
Getting your pricing right is possibly the most important part of the marketing mix. Set prices too low and sales may go up but your profit could suffer. Set prices too high and sales may fall but your margin could improve.
| For a company with a 30% Gross Margin | ||||
| Price increase (%) | Share of current sales required to maintain gross profit (%) | Price reduction(%) | Sales increase required to maintain gross profit (%) | |
| 2.0 | 93.8 | 2.0 | 7.1 | |
| 3.0 | 90.9 | 3.0 | 15.4 | |
| 5.0 | 85.7 | 5.0 | 30.4 | |
| 7.5 | 80.0 | 7.5 | 53.8 | |
| 10.0 | 75.0 | 10.0 | 87.5 | |
| 12.5 | 70.6 | 12.5 | 140.0 | |
| 15.0 | 66.7 | 15.0 | 233.3 | |
We help you understand the impact of price on profit margins and sales levels, and the delicate balance that’s needed. We can also conduct primary market research to evaluate what your competitors charge for similar products or services.
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Price and value impact how customers perceive your brand and proposition. If you promise high quality and luxury they will expect a premium price.
Email or call us on 01905 622206 today to discuss the best marketing strategies for your business. Find out more about our marketing consultancy services.
