Price

One of the essential, and most difficult decisions facing every business is choosing what price to offer their product or service for. Several considerations must be taken into account when determining pricing, including:

Tips

Starting points:

competitor pricing
your branding and quality strategy (such as cut-price or premium)
who your target customers are
desired profit margin.

The following resources may be useful in determining what price-point is most suitable for a product or service.

Consider and research the market segment (customers) you are targeting. What price are they willing to pay?
Research the price-points of competitors in your market segment.
Consider your business branding strategy. Are you looking to create a high quality, high cost brand, or a cut-price, low cost brand?
Assess your costs and desired profit margin/revenue. What price will deliver you sufficient profit whilst still being attractive to customers?

Suggested strategies:

Use search engines and catalogs to examine competitor pricing. Some industries, such as agriculture and pharmaceuticals have pricing databases.
Research your customer base through census data and surveys, to understand what price they can afford to pay, and what they are willing to pay.

The following materials link to fuller bibliographic information in the Library of Congress Online Catalog. Links to additional online content are provided when available.

Principles of Pricing by Rakesh V. Vohra; Lakshman Krishnamurthi
Call Number: HF5416.5 .V64 2011
ISBN: 9781107010659
Published/Created: 2012
This title takes an in-depth, detailed look at the many influences on pricing, and buyer behavior in response to different pricing strategies. Deeply rooted in economic theory, it presents both how to price strategically, and why.
Marketing for Dummies by Alexander Hiam
Call Number: HF5415.13 .H468 2014
ISBN: 9781118880807
Published/Created: 2014
Chapter 15 of this introduction to marketing provides a solid, easy to understand introduction to the challenge of finding the right price for your product. It addresses important concepts such as the risks of under and over-pricing, how to raise price without losing customers, designing special offers, and avoiding legal issues.
Different Thinking by Peter Kreuz; Anja Foerster
Call Number: HD53 .F665 2009
ISBN: 9780749453909
Published/Created: 2009
This title explores how businesses can operate in ‘unconventional’ ways. Chapter 4 focuses specifically on different and interesting pricing models for businesses, and how in the right context they can lead to success and profitability.

The subscription resources below marked with a padlock are available to researchers on-site at the Library of Congress. If you are unable to visit the Library, you may be able to access these resources through your local public or academic library.

Statista External This link opens in a new window
As well as providing statistical reports and forecasts, Statista includes average price statistics for a wide range of industries.
SimplyAnalytics External This link opens in a new window
SimplyAnalytics has data which answers key business research questions, provides small businesses with a tool for making sound business decisions, and helps users understand the socio-demographic and economic conditions of any geographic area in the United States. Includes the following data useful for understanding consumer preferences, consumer spending, consumer behavior and lifestyles.

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These are freely available online sources provided by government agencies, trade publications, and organizations.

How to Price Your Products (Inc.) External
Pricing your products is ‘probably the toughest thing there is to do’ according to this article from Elizabeth Wasserman. To help small businesses with this thorny issue, several pricing strategies are briefly explained and explored. Inc.com is a website dedicated to providing practical small business advice.
Census Business Builder
If you’re looking for data to help you start or grow a business or understand the business landscape for a region, this tool provided by the United States Census Bureau is what you need. Displaying housing, income, consumer spending, and demographic data at various geographic levels, this tool will help you to better understand your local customer base.
Make the Export Sale: Export Pricing Strategy (Export.gov)
A useful government-issued guide to pricing strategy specifically for export products. Includes videos and links to other sources on this topic.

Small Business Hub: A Research Guide for Entrepreneurs

Price

Tips

Starting points:

Suggested strategies:

Select Resources