Pricing can be a difficult road to walk when making a product. “Some managers view pricing as a big headache, preferring instead to focus on the other marketing mix elements. However, smart managers treat pricing as a key strategic tool for creating and capturing customer value.” (Armstrong & Kotler (2011) Marketing: An Introduction. page 4 of 59 — printed page 275)
Priced too high and it will not be bought, priced too low and it could be viewed and cheap or customers might think there’s something wrong with it. While it is difficult, price is one of the most important parts of coming up with your product. “Price is the only element in the marketing mix that produces revenue; all other elements represent costs. Price is also one of the most flexible marketing mix elements.” (Armstrong & Kotler (2011) Marketing: An Introduction. page 4 of 59 — printed page 275) I don’t want to price my brownies too high, I want them to be bought. But I don’t want to go too low, I want to make revenue.
In light of JCPenny changing their prices to whole numbers, I feel it is an interesting tactic to play with. No more .99 numbers. I like it. I’ll price my product at $2.50, with Nevada sales tax currently at 8.1%, it comes out to $2.70 a box.
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