3
Competitor pricing: In a free market, people have choices, and oftentimes, these choices boil down to what the cost of a product is. In essence, markets and consumers are in a dance to determine what the cost of a good should be. If a competitor begins to sell a similar product at a lower price, that could negatively impact my market share as their product will be purchased more frequently than mine. Conversely, if I price my product too low, there is a risk that some may think my product is cheap and not of good quality. How pricing factor is used to determine pricing: My specific approach is to price my product a shade higher than my competitors. In the event my sales start to drop, I will lower my price, but
will keep it at a level where I am turning a profit. PRICING STRATEGY: PREMIUM
General advantages and drawbacks of premium pricing strategy: Using a premium pricing strategy will draw a specific type of person looking for a higher end brand identity. Obviously, given the higher cost to purchase, there is the potential for larger profit margins as well. The flip
side to that coin is that they are more expensive to produce and market. Specific advantages and drawbacks of premium pricing strategy: I have chosen the premium pricing strategy for my Carob Chocolate Bar. An advantage is we are likely to see higher profits from this decision. Most assume that a healthier, organic product is going to cost more, so I do not anticipate a loss in revenue as a result of our pricing strategy, but that is certainly something we will be watching closely. As it pertains to my persona, given that she is a higher income earner, in a dual income household, and committed to her health for very personal reasons, it is reasonable to assume she will purchase this product.
