Answer to Question #117445 in Microeconomics for Navita Ahuja

Question

Suppose that you are in charge of pricing at a local hotpot restaurant. The business needs to increase revenue and your job is on the line. What should you do to your prices?

Answer 1

The following are price strategies that you can increase revenue in your business.

What the Market Will Bear.

 These are the idea of setting price basing on the maximum amount the market will pay to the product.

Use Pricing Analytics.

Use of an analytic tool to predict and identify what may happen in the future and set your pricing strategy to react to those predictions. It will help the business you to track goals, performance and the product price.

 Provide up-to-date pricing for your sales reps.

Use of pricing software will enable businesses to automate their pricing process and make encroachment. The allows sales business to quote prices from these customers information.

Focus on customer satisfaction.

The business should use a product analyses system with a pricing software system, which helps in boosting customer satisfaction and improve efficiency.

 Set prices to capture value.

It mainly a strategy of the price that considers the value of your product service, in opposition to the costs of product production. It would be best if you made sure strong message is in the market about your product value.

 Create a value statement.

Every business should have a value statement that c articulates how to attract the customers to purchase their product rather than buying from competitors. 

 Determine price sensitivity.

Estimate how your customer is sensitive to price fluctuations because it will help you to decide the right price and volume combination. High price can generate more revenue.

Differential pricing method.

This method involved selling different product at different prices based on quality, type of customer, time of delivery and location of the customer.