Cross-border e-commerce sellers can follow the following six steps during the product pricing process.
◆The first step: select pricing target
(1) The ultimate goal is to make profits
Consider comprehensive factors when pricing to achieve rationalization of profits; Profit is the criterion to maximize profits.
(2) The ultimate goal is to expand market share
Pricing from low to high; pricing from high to low.
Pricing from high to low means that operators seize the opportunity to price their products slightly higher than those of peer companies before a certain category flourishes in the market. By accepting its pricing, operators can quickly make profits. When the number of sellers of the product continues to increase, the product price will be lowered to attract more consumers, and the market share will be expanded by increasing sales volume.
(3) This goal can be subdivided into 3 types
Control product prices at an equilibrium level; adjust your own pricing with reference to competitors’ price levels; launch attacks on opponents , giving the price of its products an advantage in the market. Therefore, if a company has strong strength and special superior conditions, it can take the initiative to challenge its competitors and gain a larger market share.
Generally used strategic objectives are: If the company itself has sufficient operating capabilities and resource advantages, it can change its passive position, launch attacks on its opponents, and increase its market share.
Usually, the measures they take can be divided into the following three types:
★Selling at a reduced price. Operators with a strong foundation can launch attacks on their opponents, lower the prices of their own products, and win the favor of consumers.
★ Advantage product pricing. Companies with high operating capabilities and unique products can use this to price advantageous products so that the price of the product is higher than that of other similar companies.
★Low-price strategy. In order to prevent similar companies from competing for a certain category of market, some operators will lower the prices of their own products. In this way, those weak companies will give up entering the market due to low profits.
At the beginning of the establishment of the website, it is necessary to clearly define its positioning. Whether it should focus on high-end routes or attract users with high quality and low price like Wal-Mart needs to be carefully considered. This will have a negative impact on the company in the future. development has a great impact.
For example, Gome has two pricing rules:
A. Always maintain a low price strategy to attract popularity, and popularity is wealth;
B. Once the price is set, Don’t change it easily.
◆Step 2: Determine demand
One thing we need to make clear is that no matter whether the product is good or bad, it can be sold:
★If the quality is not high, then the product will be sold. Sell at reduced prices;
★High quality can increase prices and provide consumers with considerate services;
★If quality is not high and it is difficult to sell at reduced prices, improve marketing strategies and use skills Products for sale.
The following reasons can affect whether consumers pay attention to product prices:
★If the product has significant advantages and features compared with other similar products, consumers will not care too much about its price. ;
★Consumers don’t know much information about the substitutes of a certain product, so they will not pay too much attention to the product price;
★If the customer cannot know the price of a certain product, Whether the quality of a product or its substitutes is higher or lower, they will not care too much about its price;
★In terms of economic affordability, if the consumer’s income far exceeds the cost of purchasing the product, Then they will not pay too much attention to the price of the product;
★If the expenses required are not high in the overall cost of the product from research and development to final production, consumers will not care too much about the price;< /p>
★If the product consumption is not ultimately borne by consumers, they will not care too much about its price;
★If the product can be combined with products already in the hands of consumers With more value, consumers will not care too much about its price;
★If consumers feel that the product’s cost performance and popularity are higher than other similar products, they will not care too much about the product’s price;< /p>
★If the product is inconvenient to store by themselves, consumers will not care too much about its price.
Measures to detect demand trends: Enterprises apply intelligent business systems in the operation process, conduct comprehensive analysis based on system statistical information, and guide the operation of enterprises.
★Strategy 1: Analyze the obtained data
Collect the previous pricing information of a certain product in a unified manner, study the sales scale and related factors of the product, and understand the reasons and reasons for product price changes law. It can be studied according to time migration, or product price changes in different regions.
★Strategy 2: Practical reference
In the actual product sales process, adjust the prices of a small number of products and record the impact. You can practice differentiated positioning of product prices in a certain area and analyze what changes this change will have in product sales.
★Strategy 3: Survey statistics
After the consumption process is over, investigate the changes in the quantity purchased by consumers before and after the price change. Under normal circumstances, if the price is unfair, consumers will give up their purchase plan, so companies will control prices within a certain range in order to ensure sales.
◆Step 3: Estimate costs
Costs should take into account: procurement costs, labor costs, advertising costs, server costs, public costs, management personnel costs, rent, water and electricity, etc. From experience, the profit rate cannot be lower than 20%.
Auditors need to take the following factors into consideration: material costs, employee expenses, product promotion, website maintenance, basic consumption, operator expenses, etc.
According to the general situation of product operation, its profit proportion is at least 20%.
◆Step 4: Analyze competitors’ costs, prices and offerings
For operators, they should always pay attention to the product prices of similar companies and understand the competitors’ product prices. New data requires improving internal analysis systems and data statistics technology.
The production consumption and supply and demand situation of the product are important factors that affect the product price. When positioning the price, you should also refer to the opponent’s cost consumption and specific positioning, and at the same time, understand the price adjustment strategies of other companies. It is very important to analyze the consumption of your own costs and the costs of other companies to determine whether you have an advantage. At the same time, it is very important to determine whether your own products have the upper hand in terms of product quality.
If a company masters the price positioning and related information of its opponents, it can refer to these data to measure its own price settings and make timely adjustments. If the company’s products and services are not much different from other similar companies, the company’s product pricing should also be stable at the market’s existing pricing level. If the price is high, it will cause the loss of customers. If your product is more advantageous than other competitors, you can increase the price appropriately. However, it needs to be clear that competitors will also respond to other companies’ price changes.
◆Step 5: Analysis of specific pricing methods (1) Set prices based on final profits. This standard is simple and easy to understand, so I won’t go into details here. (2) Cost-plus pricing
Relative to market demand, operators pay more attention to product costs. Use this method to set prices. You don’t have to respond to changes in demand all the time.
If operators in the same field set product prices based on this, then the prices of products of different brands will be very close. They won’t compete too much in terms of price. However, if they take market demand into consideration, there will still be competition. Most people believe that this pricing method will make both consumers and businesses more satisfied. If it is a seller’s market, merchants will not take the opportunity to raise prices to increase their profits.
(3) Pricing based on consumers’ cognitive value
More and more companies use consumers’ cognitive value of products to set product prices. Companies that adopt this pricing method focus on consumer awareness, ensuring product quality and high cost performance.
(4) Popular price pricing method
Companies that use this method to set prices use the product prices of other similar companies as their main reference. Their final pricing may be the same as that of their competitors, and may not be the same as their competitors. Maybe higher or lower than other companies.
◆Step 6: Select the final price
When setting the price, the operator will measure it based on factors such as market supply and demand, product consumption, and other companies’ pricing. method to limit the price within a reasonable range. When making the final decision, the following aspects cannot be ignored.
Taking advantage of consumer customer psychology. Some consumers believe that higher prices mean higher quality, while others will compare the prices of products from different brands, or use some pricing techniques to attract customers.
Other marketing factors affect price, such as brand factors, product quality, promotion methods, channel factors (high prices must be set in high-end shopping environments), etc. In addition, companies should follow their own internal pricing principles.