Set Your Price
The price you charge for your product or service is influenced by several factors, including overhead costs, competitor pricing, pricing objectives (i.e. profit or becoming competitive in the market), and real or perceived value.
In this third step of developing a promotional plan, with your team and community, work through the environmental scan, real vs. perceived value, and price in context to determine your best pricing strategy!
Environmental Scan
Work through the questions below with your team or community to pick the best pricing strategy for your product or service. These questions help give you context and an understanding of the market environment.
- What are the costs of comparable services or items from competitors?
- How much profit are you required to make?
- What is the maximum price your target audience is willing to pay?
- How easy is it to enter the market?
HINT: Use your SWOT analysis from Step 1 of Developing a Promotional Plan to help answer the questions and guide the discussion.
Real vs. Perceived Value
Real and perceived value can significantly influence how much people are willing to pay for your product or service. Once you’ve worked through the Environmental Scan, refer back to your SWOT analysis and, with your team, community, or target audience, consider the real and perceived value of your product(1).
- What are the operating costs to produce your product or oversee your service(2)?
- Staff time
- Raw materials
- Overhead or rental costs
- How useful is the product to the user?
- Will it make their lives easier?
- Is it a product or service that will impact daily life?
- What is the value of individual components of the product or service?
What does the target audience think the product is worth?
- Does it help them reach their personal goals?
- Does the product align with the target audience’s values or interests?
- Does your product build knowledge or skills that are valuable to the target audience?
- Does your product fill a gap or need of the target audience?
- Is your product reliable?
- Does the product provide intangible benefits to the user (i.e. external pressures to purchase popular brands for status)?
Price in Context
With your environmental scan completed and real vs. perceived value data collected, it’s time to put them together! With your team or community, answer these guiding questions:
- How does your price compare to a competitor’s price?
- Can you reduce the overhead or operating costs?
- Can you increase the usefulness to the consumer?
- Can you improve the perceived value of your product?
- Can you use price incentives to increase the sales of certain products?
- Can you reduce the overhead or operating costs?
- Can you find partnerships to reduce or offset costs?
- Can you increase the perceived value of your product to your funders to offset the cost?
Applying an EDI Lens to your Price
What Can the Community Pay? Applying an Equity, Diversity and Inclusion (EDI) lens is the final element to consider as your team and community think about price in context. Afterwards (with your team, community, or target audience) consider whether the price:
Does the price make assumptions about the benefits or usefulness of the product or service to the target audience? To ensure the benefits align with your target audience’s values, check out:
- What Motivates Your Audience?
- Developing an Asset Map
- Determining Community Values and Priorities
- Gather the Community
- Cultural Relevance & Appropriateness in Programs
Does the price exclude people? If so, what can be done to address the exclusion? For example:
- Sliding scale pricing
- Price reduction programs
- Punch cards offering a free product
- Partnership with other organizations to offset costs
- Changes in policy
Steps for applying an EDI Lens
How much is your target audience able to pay? Visit the People Pillar of the Healthy Communities Framework and follow the suggested steps for applying an EDI lens to help make your product more broadly available to the target audience.
Developing a Promotional Plan
Continue exploring the steps to help guide you through developing your own promotional plan!
Step 1: Identify Your Product
Step 2: Get to Know Your Community
Step 3: Set Your Price
Step 4: Develop Your Message
Step 5: Review & Adapt
Continue Exploring Promotions
Tips & Tricks
Tips & Tricks
Tips & Tricks
Tips & Tricks
Promoting Healthy Eating
Promoting Healthy Eating
Promoting Healthy Eating
Promoting Healthy Eating
Promoting Active Living
Promoting Active Living
Promoting Active Living
Promoting Active Living
Uplifting Indigenous Voices through Storytelling
Uplifting Indigenous Voices through Storytelling
Uplifting Indigenous Voices through Storytelling
Uplifting Indigenous Voices through Storytelling
- Feuss, W & AT&T. Fundamentals of Customer Value Analysis. [report on internet]. N.d. [cited 2023 January 14]. Available from: http://www.williamfeuss.com/Inc-1.pdf
- Business Development Bank of Canada [Internet].The 5 most common pricing strategies; n.d. [cited 2023 January 14]. Available from: https://www.bdc.ca/en/articles-tools/marketing-sales-export/marketing/pricing-5-common-strategies