Go Global: Set your Prices to be Fair
Too many entrepreneurs are doing business in different locations or too many of them are planning to enter new markets all around the world. But the question is: are they actually paying attention to set prices to be fair enough for different locations? Unfortunately, the answer is: no. According to research, the prices of products and services around the world are unfairly high.
Let’s take a closer look to the solutions for dealing with this problem.
Consider Purchasing Power
First of all, if you are planning to go globally, moreover, if you are targeting different locations, you need to be aware of the differences between each market and each location that you are planning to take role. This is important because the price of a product needs to match the purchasing power of the customers depending on various locations / markets.
To be more precise, here we are definitely not talking about under-pricing your goods or services. This can be limiting, but, it can also enable you to raise your prices for the markets with high purchase power. Therefore, you need to factor in the balance of prices and purchasing power.
Consider Location-Based Pricing
As every company owner already knows, pricing process is based on many various factors. The production costs of making and selling products/services depend on other components such as rent, labor costs, materials, transport and so on. And those (fixed and variable) costs are also unstable from location to location.
However, setting prices to be globally fair requires huge effort, companies will need more details for each target location in order to decide how much they should charge for their product or service. Our advice is: they can go through GDP rates (gross domestic power) per country, per capita.
Alternatively, companies can create their own pricing lists due to GDP rate per country. For instance, this list can help you categorize the countries with similar GDP rates when it is time to define a fair pricing strategy. Frankly, this strategy can be useful for a short time. Later on, elaborate approach is necessary in order to set prices fairly enough especially for large countries.
Consider Being Competitive
Once you decide which market you are planning to enter, before setting a pricing strategy you need to consider your competitor prices as well. Even if you are already famous with the quality of your products and service, it does not guarantee that you are going to be successful here too.
Bear in mind that customers from different locations have very different buying habits. Beside that, unstable conditions on the market are affecting a customer’s buying habits equally. So, to prevent any unintended consequences, you need to know and get ready for unexpected situations. And the best approach is tracking market trends, your target customers and your competitors very closely. Afterwards, the data you obtain will help you set fair and optimal prices, no doubt. Our price monitoring tool Price2Spy can keep an eye on the competition for you – so you can focus on enhancing the level of your product/service.(If you want to learn more about what Price2Spy can do for your business click here)
All in all, being globally fair and at the same time keeping up with new markets, new customer profiles and new competitors is hard but it is not impossible with the right techniques.
