Step 1: Identify Pricing Risk Factors
Determine risks associated with your pricing objectives. Look at how the price is affected by:
supply and demand
the competition
economic conditions
government regulations
How does the target market itself affect your pricing?
Open a document and title it Pricing.
Create a heading on the document and label it Risk Factors.
Write four to five sentences that describe your product in relation to each of the specific risk factors.
Step 2: Determine Your Pricing Objective(s)
Determine your pricing objective. Note that you can choose to maximize sales, profits, market share, or simply to cover your costs and earn a modest profit.
Create a second heading on the document and label it Pricing Objectives.
Write your pricing objective in one or two sentences. Note that you may decide to optimize on more than one objective at the same time.
Step 3: List the Pricing Factors and Calculate
Open a spreadsheet and title it Pricing Worksheet.
Create five columns with the following headings:
Product/Service
Cost of Goods
Cost of Sales
Markup
Product Price
Discount
for a doggy daycare
Risk Factors:
- Supply and demand: The demand for doggy daycare services may fluctuate depending on the season or economy, affecting pricing.
- Competition: Numerous other doggy daycares in the area may influence pricing strategies to stay competitive.
- Economic conditions: Economic downturns may lead to pet owners cutting back on non-essential services, impacting pricing.
- Government regulations: Regulations on pet care facilities could require additional costs, affecting pricing.
- Target market: The specific needs and preferences of the target market, such as location, income level, and pet ownership rates, will influence pricing decisions.
Pricing Objective:
- To maximize profits while staying competitive in the local market.
Pricing Factors and Calculation:
- Product/Service: Doggy daycare services
- Cost of Goods: Costs associated with providing doggy daycare services, such as staff wages, food, and supplies
- Cost of Sales: Additional costs such as marketing and overhead expenses
- Markup: Desired profit margin
- Product Price: Calculated based on costs and desired profit margin
- Discount: Any promotional discounts or special offers offered to attract new customers.