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Asked a question 4 years ago

What pricing strategies should be adopted by entrepreneurs?

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Once an entrepreneur establish his startup the next major problem that must solve is what price he should charge for his  goods or services. As an entrepreneur with no prior experience while starting his own business, adopting a suitable pricing strategies is a difficult task. Pricing problems is very major and common problem that all startup faces. Learning how to price their offering is a on going learning experience. As there is no perfect pricing strategy so entrepreneur must try different ways to charge which suits best with its type of business and customers. Following are some strategies for startups :

  1. Cost led pricing - this method includes adding all manufacturing, distributing, selling and other expenses with certain profit margin of at least (5-10%) to set the price. 
  2. Customer led price - the price is set according to how much a customer is willing to pay for the offering. 
  3. Skimming - start with setting high prices and then gradually decreasing it. So that all cost can be recovered quickly. 
  4. Odd number pricing - offering product at odd pricing like ₹599 instead of ₹500 will have psychological affect on customers and induce them to buy it.