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Optimizing Your Pricing Strategy

When developing marketing plans for clients we must take pricing into consideration. To many, the obvious strategy would be to lower the price to increase sales. But as marketers it is our responsibility to ensure that any pricing changes are beneficial to the organization. Often the increase in sales volume needed to maintain profit margins makes lowering the price of a product undesirable to the organization.

For example, I work with Villain Theater and we currently have branded glassware for sale. When we first introduced our glassware, we had our large mugs priced at $18.00, pilsners at $15.00, and small mugs at $12.00. We sold a good amount initially, but sales quickly stagnated, leaving us to reconsider our pricing plan. We initially considered reducing the prices by 20% across the board in order to hopefully increase the number of sales. But since we have a limited available stock, we decided that it was better to increase prices slightly in order to increase revenue, even if it slightly decreased the number of sales. So we raised the prices to $20.00, $18.00, and $16.00 respectively. The sales have slowed slightly for the pilsners and small mugs, but the large mugs have continued selling at the same rate despite the higher price point. Overall, the higher prices have succeeded in increasing our daily revenue from the product.  

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