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Pricing is just one part of a marketing plan, but it is a big one. This is where you detail your pricing strategy with regard to the ways it aligns with the needs of your customers (based on their buying habits and price sensitivity) and how the margins you establish will cover operating costs.
Be sure to frame your pricing structure in relation to your competition, with a focus on direct competitors.
Explain your method or methods of setting prices. For most small businesses, having the lowest price is often not a good policy. It robs you of needed profit margin; customers may not care as much about price as you think; and large competitors can under price you anyway. Usually you will do better to have average prices and compete on quality and service. Some questions you may want to consider in this section include:
● Is your pricing competitive? Is it a competitive advantage?
● Compared to your closest direct competitor, would you be considered a bargain choice or a premium brand?
● Does your pricing strategy fit with what was revealed in your competitive analysis?
● Compare your prices with those of the competition. Are they higher, lower, the same? Why?
● How important is price as a competitive factor? Do your intended customers really make their purchase decisions mostly on price?
● What will be your customer service and credit policies?
