Pricing your proposed service or product

Establishing a pricing strategy for a new product or service is an important part of the development process. You should consider pricing the moment you decide to take an idea forward as it will determine how much you can afford to invest in the project.

You will need to take the following factors into account:The benefits - or value - to the customer of your product or service compared with what the competition has to offer. Will the price be one that customers are prepared to pay?,Whether or not you're first to market. Is your product or service revolutionary or are you following a market trend?,The selling channels you want to use, which will affect your promotional spend and distribution costs.

Match products and services to market needs:New products and services have to offer benefits that meet your customers' needs. You need to discover what these are.Market research, using techniques such as surveys and focus groups, will help you do this. See our guide on market research and market reports. Not only must you meet your customers' needs, you have to do so in a way that is better than the alternatives offered by the competition.Your new product or service needs a unique selling proposition - a feature or property that makes it stand out in the marketplace




Remember that although the end user of your product or service might be your most important customer, you may have to take the needs of other parties into account.For example, if you were planning a new DIY product, you would need to consider how retailers would stock it as well as how it would benefit professional decorators. If you're creating a toy, you should consider what parents as well as children will think of it.Your competition