Once you develop your product – whether it’s a new class, a workshop, a show, a line of jewelry or costumes, etc. – you’ll need to figure out what it’s worth to your consumers. The business model behind it comes into play here, of course… the price has to have enough margin built in that you can make money on it! But from a marketing standpoint, the important part of pricing is understanding what price the market will bear, how to discount your offering – if you must – to achieve your revenue and profitability goals, and importantly, how to communicate your pricing clearly.
- Again, pay attention to the market and do some research. Your best and easiest benchmark is what others are charging for similar products. But – (back to the objectivity issue) think carefully about whether your product is really the same as the ones to which you are comparing it. Are their earrings silver-plated and yours are sterling silver? Your product will be worth more to the customer. Are their workshop instructors nationally-known, while yours are more like “hidden treasures?” You may have to accept the fact that to the customer, your product is not worth quite as much.
- A commonly-discussed concept in marketing is “training the consumer.” For many larger events, consumers have been trained to expect “early bird” discounts, and that’s something you may just have to deal with. This drives early registrations so you can get a sense of how well the market is responding, drives revenue so you can start covering costs, and generates word-of-mouth awareness. You will need to limit the discount by time, quantity, or both. Back to the business model – you just need to determine how much you can discount your product and still make a profit.
Ready for Part 3... PLACEMENT?