Costing and Pricing Your Products

No matter how good your business concept, keeping costs competitive and pricing your products to optimise profit are crucial to success. Many businesses fail to achieve their potential because they lack the basic skills to set prices effectively. By mastering the tools you will react quickly and appropriately to competitor price changes, market opportunities and increased cost pressures.

Good cost data and understanding what drives your costs are your two core weapons to manage your cost base.

While pricing is ultimately market driven, there are simple tools which will empower you to negotiate effectively with customers, and manage your discounting policies to increase your bottom line.

Pricing requires both marketing skills and also financial discipline to ensure that your pricing strategy and individual discounting and promotional decisions make sound financial sense

• Establishing simple costing systems that answer all the right questions
• Using cost data to make better commercial decisions
• Basic rules of pricing - what dictates minimum and maximum viable prices
• Using contribution analysis to make quick rational decisions on discounting, promotions costs
• Pricing strategy alternatives - from price skimming to marginal pricing. What makes sense when