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PRICE SETTING WORKSHEET
Things to Take in Consideration When Setting Price
You should consider setting prices above your competitors prices if
Yes
No
?
Your market is not sensitive to price changes.
Your market consists mainly of growing commercial customers.
Your product is an integral part of an established system.
Your reputation for status, service, and other positive perceptions in the market increases your products perceived value.
Your customers can easily build your price into their selling price.
Your product is only a tiny percentage of your customers total costs.
You should consider setting your prices just below your competition if
Your market is very sensitive to price changes.
Your customers need to reorder parts or supplies.
Your business is small enough that a lower price will not threaten your larger competitors and start a price war.
You have the option of economical production runs which decrease your unit cost.
You have not reached full production capacity.
Estimating Demand
1. Which products/services do customers shop around for?
2. Which products/services are in greater demand even at higher prices?
3. Are certain products/services in greater demand at one time of the year than another? If so, which? And what is the duration of the demand?
4. Do your customers expect a certain price range?
5. What is the balance between price and quality in your market?
The Competition
1. What are your competitors pricing strategies?
2. Are your prices based on an average gross margin consistent with your competitions?
3. Is your policy to sell consistently at a higher price, lower price, or the same price as your competitors? Why?
4. How do competitors respond to your prices?
Pricing and Market Share
1. What is your present market share?
2. What are your market share goals? To increase share? Maintain share?
3. What effect will price changes have on your market share?
4. Is your production capacity consistent with your market share goals?
Strategy
1. Have you determined how pricing affects your sales/volume goals?
2. How can pricing help you gain new business?
3. Have you tested the impact of price strategies on your markets?
4. Are your strategies in line with broader economic trends?
Policies
1. How does the nature of your products/services affect their price?
2. How does your method of distribution affect price?
3. Do your promotional policies affect prices?click to download Price Setting template
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