MKL helps you, the business owner, do the following:
- Focus on the customer - not yourself.
- Describe the characteristics of customers and situations where you add unique value, where there is literally no substitute.
- Understand who the customer is and why they would be willing to pay.
- Understand the limits of the customer segment… the grouping of customers with like minds.
- Remember that the market positions you, you don't position yourself.
There are five (5) classic Price vs. Selling Effort strategies:
||CLASSIC SKIM STRATEGY
||CLASSIC PENETRATION STRATEGY
||FLAWED PRODUCTS STRATEGY >
|| < FLAWED PRODUCTS STRATEGY
CLASSIC SKIM STRATEGY involves setting a high initial price and then progressively lowering the price as time passes and competition sets in. The objective is to maximize short-term profits. Even though sales will likely be modest with skimming, the profit margin is great. This pricing approach is most often used for high-prestige or otherwise unique products with significant cache. Once the product's appeal broadens, the price is then reduced to appeal to a greater range of consumers. Skimming pricing results in much slower acceptance of a new product, but higher unit profits.
CLASSIC PENETRATION STRATEGY is a method of pricing a standard product. It sets a low initial price for a product in order to gain quick acceptance in a broad portion of the market. It calls for a sacrifice of short-term profits in order to establish a certain amount of market share. One objective is to obtain a committed customer. With this policy, the initial price of the good or service is set relatively low in hopes of "penetrating" into the marketplace quickly and securing significant market share. Penetration pricing results in greater initial sales volume, but lower unit profits.
A FLAWED PRODUCT STRATEGY is where: 1) the Product does not match up with the Promise (the value proposition), 2) is not Priced correctly, and 3) doesn't have a coherent Prospect (potential customer) which causes the most obvious problems in generating revenue.
means that there are problems with:
- The Product
- The Price
- The Prospect
In other words, the Product does not match up with the Promise (aka value proposition), is not correctly Priced, and doesn't have a coherent Prospect (aka customer) and causes the most obvious problems in sales.
MKL can help you select and implement the most effective methods to increase your sales and bottom line and reach your targeted market at the right cost.
Contact MKL Business Services at: 855-343-5544 or email: expert@MKLbizConsulting.com