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Entrepreneurship

Learn from Mr. Bernstein's insights on Pricing Strategy in entrepreneurship, covering factors affecting pricing, cost-based and demand-based approaches, pricing techniques, analyzing pricing through break-even and markup, and revising strategies based on market dynamics. Determine your objectives, whether ROI, market share, or cash flow for survival. Understand competition dynamics and choose flexible pricing policies. Evaluate if you compete on price, service, or quality.

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Entrepreneurship

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  1. Entrepreneurship Mr. Bernstein Pricing Strategy, pp 230-247 April 3, 2014

  2. EntrepreneurshipMr. Bernstein Factors Affecting Price Costs – Fixed or Variable Supply and Demand Consumer Perceptions Competition What are your objectives? Return on Investment Gaining Market Share Cash Flow / Survival

  3. EntrepreneurshipMr. Bernstein Pricing Strategy Approaches Cost-Based Pricing Cost plus markup Demand-Based Pricing “What the market will bear” Competition-Based Pricing “Price Takers” Flexible or One-Price Policy What approach(es) would you use? Why?

  4. EntrepreneurshipMr. Bernstein Pricing Techniques Psychological pricing: Prestige pricing Odd/even pricing Price lining Promotional pricing Multiple Unit discounts Bundle pricing What are examples of each?

  5. EntrepreneurshipMr. Bernstein Analyzing Pricing Break-even Analysis: Number of units that must be sold to cover fixed costs Fixed Costs / (Unit Selling Price – Variable Costs) = Break-Even Point

  6. EntrepreneurshipMr. Bernstein Analyzing Pricing Markup: Amount added to the cost of an item Cost + Markup = Price Markup / Cost = Percentage Markup AKA “Gross Margin”; doesn’t include overhead costs

  7. EntrepreneurshipMr. Bernstein How often should pricing be revised? Elastic demand – revise often Do you compete primarily on price, service or quality?

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