15th August 2007
THE PRICE IS RIGHT
Too many businesses are losing out on profits because they do not get their prices right.
Getting and sustaining higher prices ought to be a top priority for entrepreneurs, according to the University of Lincoln’s Professor Colin Coulson-Thomas. But he believes too many agonise about perfecting the product and then take quick pricing decisions based on guesswork.
Professor Coulson-Thomas was speaking at the Gordon Institute of Business Science, near Johannesburg , South Africa, where he outlined the benefits of effective pricing and how it impacts on success or failure.
His report, Pricing for Profit – The Critical Success Factors, reveals that many businesses are missing opportunities to use pricing to improve profitability and build more rewarding relationships with customers.
Professor Coulson-Thomas said: “Pricing decisions impact directly upon sales revenue and profitability. Charge too much and orders are lost, charge too little and it may give the impression that offerings are of low quality.”
Professor Coulson-Thomas has compared companies that are most successful at using pricing to achieve business objectives with those that are least successful. He said: “Leaders understand the strategic importance of pricing and attempt to sell value as opposed to price.
“Leaders adopt a very different approach when building their businesses and they are five times more likely to increase volume to achieve economies of scale.
“Overall, leaders put greater effort into pricing. They use a wider range of sources to gain price information. They keep their finger on the pulse of the customer, the user and the industry opinion and review their approaches as circumstances change.”
The report can be obtained from Policy Publications by visiting www.policypublications.com or www.ntwkfirm.com/bookshop/ For further information please contact Professor Coulson-Thomas by emailing firstname.lastname@example.org
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