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7 Mistakes in Pricing to Avoid


16 September 2022
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Price is an important factor that determines the success of your business. In running any business, various methods and approaches are used by entrepreneurs to set the best prices that can compete with other businesses. Increasingly, the level of buying and selling through e-commerce or online stores is getting higher and more competitive.

With online sales, your business does not only compete in one city, but with all similar businesses throughout the country and even abroad. Therefore, the pressure to optimize the best pricing is greater and continues to grow. The way or approach to setting the best price for your business may vary greatly to choose from.

Mistakes to Avoid When Setting Prices

Regardless of what approach you take, here are some basic pricing mistakes you should avoid. There are seven mistakes in pricing that you should avoid when running a business.

1. Assumptions regarding low prices will provide the best results

Logically, determining the lowest price can easily attract your business's target audience, but in reality this is not always the case. In fact, lowering the price of your product too drastically can reduce the perceived value to consumers. Apart from that, doubts will arise about the quality of the product if the price is too low, which will impact sales.

Instead of sacrificing too much profit in pursuit of high sales figures, set targets to determine product prices based on what is offered to consumers. Find your product's sweet spot on the price-quality matrix to determine how the product is perceived by the consumer base. That way, you can determine the best price for business products.

2. Doesn't provide a variety of options

Nowadays, consumers are accustomed to being presented with many choices every time they make a purchase. Be sure to offer multiple pricing options for different versions or sizes of the product. The choice of delivery methods that can be tailored to consumer needs also provides benefits. This allows consumers to customize purchases and delivery methods based on personal needs and offers differentiated engagement. This can make consumers feel more in control in choosing their purchases.

3. Not Practicing Customer Segmentation

Every consumer has their own needs and desires. Therefore, you should try to meet consumer needs. This can be done by dividing consumers into various types of individuals through customer segmentation. After doing research and getting data to determine the types of consumers who buy your products, adjust some approaches.

Approaches that can be taken include adjusting the packaging and the way the product is presented, or by setting a product selling price that suits your target audience. The adjustments made allow you to take full control over the value consumers perceive from what your business offers.

4. Complicating the Offer

When forming product prices in your business, you need to remember to keep the price display as simple as possible. Including small details such as not including decimal points and other punctuation or avoiding the hassle of reading and pronouncing the nominal price listed. The smoother and easier it is for consumers to understand the nominal price of a product, the faster they will decide on a  purchase and payment.

5. Postpone the use of automated systems

Automated integration systems to help optimize prices are becoming one of the most useful tools in retail today. By using various key data points, this approach or method will make it easier for you to set the best product price point in terms of how high or how low the price should be set. Apart from this, this system will also make it easier for you to target certain segments of your consumer base.

6. Not Testing New Approaches

Without trying new approaches to adjusting product prices, your business may decline over time. It is important to carry out consistent testing so it is necessary to plan when running a business.

New pricing strategies are always being developed, but businesses will not be able to take advantage of them unless you are willing to provide valid new pricing techniques. Conduct A/B testing to see new ways of pricing compared to your tried-and-true methods. After that, you simply apply the tactics that show beneficial performance.

7. Not Focusing on Consumer Experience

As mentioned in the previous point, perceived value should be the most important determining factor in how to price your business products. More than your business competitors do and can offer the best deal to your consumers. It is better to follow the customer's perspective (desires and satisfaction) than to follow the company's costs too strictly.

Perceived value can place your business squarely in the shoes of your business's target audience, keeping the customer experience front and center. Therefore, it is important to always review and evaluate your business through the eyes of consumers for the development of your business and products.

In practice, running a business while carrying out trial and error brings the business to the research and data collection stage. You can continue to carry out reviews and evaluations, especially from a consumer perspective and prioritize buyer satisfaction and experience.

Through the Marketing Pricing Strategy program, company executives can understand the correct and appropriate pricing context that will determine the future of the product and company. This is not limited to just a few people's responsibilities because it involves finance, marketing, sales and production interests, making price setting very challenging.

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Product branding is now increasingly important in the era of ever-growing globalization and digitalization. Technological advances and the development of social media have created a more dynamic and competitive market.

Branding is not only about how your product looks, but also about how your product is perceived and remembered by consumers. In essence, branding is the art and science of creating a strong and consistent image for your product or service.

Effective branding can create emotional connections with consumers, build loyalty, and differentiate your product from competitors. Find out the definition, types, benefits and exact steps to do it in the following article.

Definition of Product Branding

Product branding is a strategic process of creating a unique identity for a product or service through various elements. Branding is not only related to visual aspects, but also includes perceptions, values ​​and emotions associated with the product.

With effective branding, a product can create a strong and memorable image in the minds of consumers. Ultimately this will contribute to the success and sustainability of the business.

Types of Product Branding

Product branding includes various types of strategies that can be used to create a unique and strong identity for a product or service. Here are some common types of product branding:

Corporate Branding

Focus on the company as a whole rather than individual products. Example: Apple, which is known not only for its iPhone or MacBook products, but also for innovation and overall quality.

Product Branding

Create a unique identity for individual products that differentiates them from other products on the market. Example: Coca-Cola with its signature soft drink products.

Personal Branding

Focuses on specific individuals, often used by celebrities, influencers and professionals to promote themselves and their work. Example: Oprah Winfrey or Elon Musk.

Co-Branding

Several brands collaborate to produce new products or services. This can help expand market reach and increase credibility. Example: Collaboration between Nike and Apple for Nike+iPod products.

Geographic Branding

Promoting products or services based on a specific geographic location, often using origin as a competitive advantage. Example: Parmigiano-Reggiano Cheese from Italy.

Retail Branding

A strategy used by retailers to create a unique identity for their stores. Example: IKEA with its unique store concept and furniture products.

Benefits of Product Branding

The importance of product branding lies in its ability to change the way consumers view and interact with your product. Here are some reasons why product branding is important:

Differentiate from Competitors

In a market filled with similar products, strong branding helps your product stand out. A unique and different identity attracts consumers' attention and gives them a reason to choose your product over competitors' products.

Building Consumer Trust

Consumers tend to have more trust in products that have consistent and professional branding. Good branding creates a perception of quality and reliability which ultimately builds consumer loyalty.

Facilitate product introduction

Effective branding makes it easier for consumers to recognize your product among many other products. Visual elements such as logos, colors, and packaging, as well as auditory elements such as slogans and jingles, all contribute to building product recognition.

Facilitate product introduction

Products with strong branding can often be sold at higher prices than products without clear branding. Consumers are willing to pay more for products they know and trust.

Steps in Building Effective Branding

Building effective branding is key to ensuring your product is not only known, but also remembered and loved by consumers. The following are some important steps that need to be followed in building effective branding:

Determining the Target Market

The first step in building branding is understanding who your target market is. Knowing your consumer demographics, psychographics and behavior will help create the right message and identity.

Building Brand Identity

Brand identity includes the brand name, logo, colors, typography and other visual elements. Make sure these elements reflect your brand's character and values. Consistency in the use of visual elements is critical to building recognition and trust.

Creating a Brand Message

Brand messaging is how you communicate with consumers. It includes taglines, slogans, and narratives that tell your brand story. Messages must be clear, consistent, and relevant to your target market.

Implementing Marketing Strategy

In the digital era, a strong online presence is essential. A professional website, active social media profiles, and a good content strategy will help you reach and interact with consumers more effectively.

Supporting Innovation

A good understanding of user needs and expectations can drive innovation and better product development in the future.

Product branding is a crucial element in modern business strategy. By building a strong identity and creating consumer trust, effective branding can bring long-term success to your product.

By following these principles, you can ensure your products are not only known, but also loved by consumers.

Product branding is only one of many management strategies that companies can carry out. Understand more about the various elements of management strategy through the Strategic Brand Management program from prasmul-eli.

With a study duration of 2 days, this ISO 9001:2015 certified program has the following five discussions:

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Contact prasmul-eli for more complete information via this link!

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User Experience (UX) is a crucial element in the success of products and services in the digital era. In various applications, UX plays an important role in determining how users interact when using a product.

Creating a positive experience is not just about providing an attractive appearance, but also involves a deep understanding of user needs and behavior. Good UX can increase user loyalty, reduce churn rates, and even accelerate product adoption in competitive markets.

This article will thoroughly examine various aspects of UX, from understanding to its practical application in the business world.

Definition of User Experience (UX)

User Experience (UX) is a concept that covers all aspects of a user's interaction with a company, service, and product. The goal is to create a satisfying and enjoyable experience for users, and meet their needs and expectations.

UX focuses not only on visual design, but also on the entire process that users experience. This process starts from searching for information to using the product or service.

User Experience (UX) Function

The function of user experience in product development is vital to achieving success in a competitive market. By understanding the various key functions of UX, companies can create optimal experiences and in turn increase retention and loyalty.

Here are some of the main functions of UX:

Increase User Satisfaction

The main function of user experience is to increase user satisfaction by making their interaction with the product easier, efficient and enjoyable. Good UX ensures that users can quickly find what they are looking for and complete tasks without difficulty.

Increase User Retention and Loyalty

Positive user experience drives loyalty. When users feel comfortable and satisfied with a product, they tend to continue using it and even recommend it to others.

Increase Efficiency and Productivity

Good UX can increase user efficiency and productivity by providing an intuitive and functional interface. Users can complete tasks faster with fewer errors, which means they can focus on more important things.

Reduce Customer Support Costs

Products with poor user experience tend to cause frustration and confusion for users, which ultimately increases the need for customer support. By investing in improving UX, companies can reduce the number of support calls and requests, which in turn can lower operational costs.

Increase Conversion Rates

In the context of e-commerce or sales-oriented applications, good UX can increase conversion rates. By designing a clear and simple user path from start to finish, users can make purchases more quickly.

User Experience (UX) Components

Each UX component plays an important role in creating a holistic and satisfying experience for users. The following are the main components of user experience, including:

  1. Usability: Provides easy navigation, an intuitive interface, and ease in achieving user goals.
  2. Interaction Design: Ensure interactions between users and products are smooth, responsive, and efficient.
  3. Visual Design: Attract users' attention through aesthetic and functional visual elements.
  4. Information Structure: Organizing content and information so that it is easy for users to find and understand.
  5. Accessibility: Ensure that the product can be used by everyone, including those with disabilities.
  6. User Satisfaction: Measures the extent to which users are satisfied with the experience they get.

The Importance of User Experience (UX) for Business

Implementing the right UX  can build stronger relationships with customers, increase loyalty and ultimately drive business growth.

The importance of user experience in business can be seen from the various benefits it offers, some of which are:

Increase User Satisfaction

The first benefit of user experience is that it can increase customer satisfaction. A good experience makes users feel satisfied and happy using the product or service. This can increase user loyalty and retention.

Reducing Costs

Products designed with good UX can reduce customer support costs because users experience problems or confusion less frequently. This reduces the number of calls and assistance, which in turn reduces the workload of customer support teams and lowers operational costs.

Increase Conversions

Websites or apps that have good UX tend to have higher conversion rates. This is because users feel comfortable and easy in achieving their goals, such as making purchases.

Building Brand Reputation

Positive experiences can improve brand image and reputation. Users who are satisfied will usually recommend the product or service to others.

Supporting Innovation

A good understanding of user needs and expectations can drive innovation and better product development in the future.

User experience is a very important aspect in product and service development. By focusing on UX, companies can increase user satisfaction, reduce costs, increase conversions, and build a strong brand reputation.

UX is just one aspect that you need to master in the world of Digital Marketing. Optimization still needs to be done in the realm of search engines, websites and social media.

Understand more about the application of digital marketing to companies through the Digital Marketing Fundamentals program from prasmul-eli.

With a study duration of 2 days, this ISO 9001:2015 certified program has the following seven discussions:

  • Introduction to Digital Marketing Strategy
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  • Digital Marketing Strategy & Workshop


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What is a Customer: Characteristics, Types and Functions
16 July 2024

You must have heard the term customer often. However, what exactly is a customer and what is its function for business development?

Customers are always the main concern of every company. The reason is, without customers of course there will be no income. Then, without income, the company cannot survive.

Therefore, understanding customers, from their definition to their characteristics, is very important for business success. Customers are not just buyers of products or services; they are part of the business ecosystem and play an important role in the company.

A deep understanding of customer types can help companies develop more effective and efficient marketing strategies.

In this article, you will find out various aspects about customers, starting from definitions, characteristics, to types and functions in business.

Definition of Customer

Customers are individuals or organizations who buy goods or services from a company. In business, they are the most important element because they are the main source of income for the company.

The success of businesses depends largely on their ability to attract, retain and satisfy customers. Without customers, a company cannot operate and generate profits.

Customer Characteristics

After understanding what a customer is, you also need to know what the characteristics of the customer are.

Companies need to deeply understand who their customers are and what they want. This understanding includes not only knowledge of their needs and expectations, but also the unique characteristics that shape their purchasing decisions.

Here are some characteristics of customers:

Needs and Desires

Customers have certain needs and desires that they want to fulfill. Companies must be able to identify and understand these needs and desires to be able to offer appropriate products or services.

Hope

Customers have certain expectations for the products or services they buy. These expectations include quality, price and service.

If these expectations are not met, customers may look for other alternatives.

Experience

When customers interact with a product or service, it greatly influences their satisfaction. Positive experiences can increase customer loyalty, while negative experiences can cause them to switch to competitors.

Loyalty

Customer loyalty is their level of loyalty to a particular company or brand. Loyal customers tend to make repeat purchases and recommend products or services to others.

Communication

Customers often communicate with companies through various channels, such as email, telephone, social media, and face to face. Effective and responsive communication can increase customer satisfaction.

Types of Customers

Understanding different types of customers is key to designing effective business strategies. Each customer has different behaviors, needs, and preferences, which influence how they interact with a company.

The following are several types of customers commonly found in business:

New Customer

Customers who are buying products or services from the company for the first time. The company must give a good impression to ensure that these customers return to make purchases.

Loyal Customer

Customers who consistently make purchases from the company over a long period of time. They are often loyal advocates of the brand and contribute significantly to the company's revenue.

Potential Customers

Individuals or organizations who have the possibility of becoming customers in the future. Companies need to make marketing and sales efforts to attract their attention.

Passive Customer

Customers who rarely make purchases or only buy in small quantities. Even though their contribution to revenue may be small, they are still important because they can turn into loyal customers.

Former Customer

Customers who previously purchased a product or service but no longer do so. Knowing the reasons behind their decision to stop purchasing can help companies improve their services and products.

Customer Function in Business

Every business that wants to develop and survive in the long term must understand the importance of the role of customers.

Here are some customer functions for business that you need to understand:

Source of Income

Customers are the main source of company income. Without customers buying products or services, companies cannot make money and remain operational.

Feedback

Customers provide valuable feedback regarding products or services. This feedback can help companies understand their strengths and weaknesses, as well as improve and develop new products or services.

Word-of-Mouth Marketing

Satisfied customers tend to recommend products or services to others. Word of mouth marketing is one of the most effective forms of marketing and can increase a company's reputation and market share.

Product Innovation

By understanding customer needs and desires, companies can develop new products that are more innovative and in line with market demand.

Loyalty

Satisfied and loyal customers tend to make repeat purchases and form a stable customer base. Customer loyalty can also help companies survive in difficult market conditions.

 

After reading the description above, of course you already understand what a customer is and its benefits for business, right?

Customers are a crucial element in the business world. In a competitive business environment, the ability to properly meet customer needs is key to achieving long-term success.

Companies must always focus on customer experience, loyalty and innovation to remain relevant and competitive in the market. For this reason, a deep understanding of customer management is mandatory.

Learn more about how to maintain satisfaction and good relationships with customers through the Customer Satisfaction & Relationship program from prasmul-eli.

With a learning duration of two days, this ISO 9001:2015 certified program has the following 10 discussions:

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  • 8Ps for customer satisfaction
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  • Customer Loyalty Ladder
  • Customer Relationship Management
  • Share of Wallet
  • Cross Sell and Up Sell


Contact prasmul-eli for more complete information via this link!