Business Development Services 1 What’s your pricing strategy? Session 6

Business Development Services 2 What have you learned about feasibility planning?  Think of two new things you have learned about feasibility planning in the course.  Take turns telling your group members.  Decide who will write, and who will report back to the group  If your idea is the same as the person before you, think of something different

Business Development Services 3 Muffin activity

Business Development Services 4  Explore how prices are set in the market  Choose a pricing strategy for your business  Complete your initial sales forecast Session objectives

Business Development Services 5  What is a strategy?  What skills are important in strategy?

Business Development Services 6  Strategy:  a plan, method or series of moves to reach a goal  E.g. hockey strategy, business strategy, marketing strategy, pricing strategy, etc. Strategy: Definition

Business Development Services 7 Decision-making skills + strategy + hard work Can win the game The right strategy can give you an edge over the competition

Business Development Services 8 = Research + math + psychology + experience The right price

Business Development Services 9  The 3 C’s  Market perception  Cost plus Three tools to help you set your price

Business Development Services 10 Price Who decides? Maximum Minimum Other options Tool #1: The 3 C’s

Business Development Services 11 Price Who decides? Customer Minimum Other options Tool #1: The 3 C’s

Business Development Services 12 Price Who decides? Customer Your Cost Other options Tool #1: The 3 C’s

Business Development Services 13 Price Who decides? Customer Your Cost Your Competition Tool #1: The 3 C’s

Business Development Services 14 Price Who decides? Customer Your Cost Your Competition What happens here? Tool #1: The 3 C’s

Business Development Services 15 Price Who decides? Customer Your Cost Your Competition Price too high, nobody will buy Tool #1: The 3 C’s

Business Development Services 16 Price Who decides? Customer Your Cost Your Competition Price too high, nobody will buy What happens here? Tool #1: The 3 C’s

Business Development Services 17 Price Who decides? Customer Your Cost Your Competition Price too high, nobody will buy Price too low, you’ll lose money Tool #1: The 3 C’s

Business Development Services 18 Price Who decides? Customer Your Cost Your Competition Price too high, nobody will buy Price too low, you’ll lose money Select a group of competitors that match your product/service (it may be all the competitors) Tool #1: The 3 C’s

Business Development Services 19 Price Price too high, nobody will buy Price too low, you’ll lose money Think about where you would like your price point to be: in the middle, higher or lower Your product/service ? ? ? Tool #1: The 3 C’s

Business Development Services 20 Price Price too high, nobody will buy Price too low, you’ll lose money Select a price for your product/service. You will use this price as your assumption going forward. Select a price for your product/service. You will use this price as your assumption going forward. Your product/service ? ? ? Tool #1: The 3 C’s

Business Development Services 21  What does market perception mean?  How do you want your price to compare with other products/services with similar features and quality?  ACTIVITY: Four market perception strategies Tool #2: Market Perception

Business Development Services 22  Get into table groups  Read the four strategies on p. 8.  Read about the three businesses on p. 9  Answer these questions:  What strategy is the business owner using?  Why? Activity: market perception

Business Development Services 23 Cost plus = costs to produce a product/service + markup (%) Markup: amount added to cover expenses and allow for a profit E.g. 10% markup, 15% markup Tool #3: Cost Plus