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PRICING 1: SETTING YOUR SELLING PRICE
A big part of how people see your brand is what price you set for what you sell. Their views are influenced by where your brand is positioned against your competitors price wise, whether you have year-round sales, do the occasional three-for-two offers, give discounts, or set a top price and never negotiate.
The idea You can base your pricing on a combination of these four things: Costs Customers Competition Corporate strategy Most importantly, you’ve got to cover your costs or you’ll go out of business. There’s a pricing system called cost plus, which has been in operation since Victorian times, and which some companies today still use to set their prices. It’s a good basis to make sure that your costs are covered, but it’s not enough. These days companies generally look at what their customers are prepared to pay and what their competitors charge, and then influence prices according to what they’re intending to do with their company in future. The cost plus pricing method basically involves adding up all the costs to get an annual total, then adding a percentage profit on top to work out the selling price. For example, many department stores
48 • 100 GREAT BRANDING IDEAS
100 Great Branding Ideas 14dec.indd 48
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