We are excited to announce a new PriceBeam webinar about how to take pricing into consideration sooner in the product development process and thus developing new products or services that better match what the market is demanding and is willing to pay for.
Pricing Managers, Marketing Managers, and Sales teams often find it more difficult to get pricing right when launching a product in a new market, as opposed to pricing the same product in an existing market. In theory existing-market pricing should go through the same steps as new-market pricing and look at value drivers and willingness-to-pay, but in many situations existing markets mean there is a reference point to base the price on. Such a reference point is lacking if pricing for a new market.
Here are 7 ways for getting the price right when launching in new markets.
Launching a new product, whether you are in a startup or a well-established corporate environment, can be a daunting task. Everything from product development to marketing materials, sales training, customer communication and pricing comes in play. One of the biggest determinators of success is getting pricing right: price too low and the profitability is broken, plus it is almost impossible to later increase the price (substantially). Launch at too high a price and you may not sell enough to get off the ground.
Barriers to entry and the difficulty of doing business abroad have reduced considerably over the last two decades, thanks to technologies such as the Internet. This means it is much easier to do business around the globe but also that brand and product communication is increasingly global. Customers or consumers in Germany can now see product features, prices and discounts offered in USA or Singapore, and may create bad publicity if they feel that what they pay for locally is not of the same value. International prices are also considerably more transparent than ever before. On the other hand, both willingness-to-pay and actual prices do differ considerably around the globe, be it of similar of even identical products. What an Indian or Brazilian customer is willing to pay for Product A may not be the same. Or, a German customer may value Feature B over Feature A whereas the Canadian or Danish customer really only cares about Feature B and maybe Feature C that is not even available in Germany.
Launching new products or services can be a daunting task. With everything from product development, marketing, sales training, customer communication, as well setting the price. Price research can help in various ways with these challenges.
When setting the price for a new product*, willingness-to-pay research can be a strong decision support tool. But there are different types of WtP research and different situations that require different methodologies.