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Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst the four Ps, the rest being cost centers. Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus pricing is very important in marketing.

What a price should do
A well chosen price should do three things:    achieve the financial goals of the company (e.g., profitability) fit the realities of the marketplace (Will customers buy at that price?) support a product's positioning and be consistent with the other variables in the marketing mix  price is influenced by the type of distribution channel used, the type of promotions used, and the quality of the product  price will usually need to be relatively high if manufacturing is expensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaigns  a low cost price can be a viable substitute for product quality, effective promotions, or an energetic selling effort by distributors From the marketer's point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay. In economic terms, it is a price that shifts most of the consumer surplus to the producer. A good pricing strategy would be the one which could balance between the price floor (the price below which the organization ends up in losses) and the price ceiling (the price beyond which the organization experiences a no demand situation).

Pricing methods
As we said earlier, there is no "one right way" to calculate your pricing. Once you've considered the various factors involved and determined your objectives for your pricing strategy, now you need some way to crunch the actual numbers. Here are four ways to calculate prices:

Cost-plus pricing - Set the price at your production cost, including both cost of goods and fixed costs at your current volume, plus a certain profit margin. For example, your widgets cost $20 in raw materials and production costs, and at current sales volume (or anticipated initial sales volume), your fixed costs come to $30 per unit. Your total cost is $50 per unit. You decide that you want to operate at a 20% markup, so you add $10 (20% x $50) to the cost and come up with a price of $60 per unit. So long as you have your costs calculated correctly

Psychological pricing . even if you don't have any direct competition. For example. you will always be operating at a profit.If you want to be the "low-cost leader". there is one more major factor that must be considered.Ultimately. you want to be able to be off by a factor of two or more (your sales are half of your forecast) and still be profitable. Popular price points . Now. or $10 profit per unit.000 a year in. but more than enough increase in sales to offset it.000 units. Your expected sales volume is 1. This is usually the most profitable form of pricing.  Target return pricing .2 and have accurately predicted your sales volume. Meals under $5 are still a popular price point. let's use the same situation as above. and customers would gladly pay it. so you need to make $10. in which you charge on a variable scale according to the results you achieve. how do you combine all of these calculations to come up with a price? Here are some basic guidelines:  Your price must be enough higher than costs to cover reasonable variations in sales volume. and assume that you have $10. how far off can you be and still be profitable? Ideally.Sometimes it simply doesn't matter what the value of the product is. "Enough under $20 to be under $20 with sales tax" is another popular price point. figuring things like:    Positioning . $60 seems like a bargain maybe even too cheap.Set your price to achieve a target return-on-investment (ROI). However. if you can achieve it. "under $100" is a popular price point. The most extreme variation on this is "pay for performance" pricing for services. If your product reliably produced that kind of cost savings.000 units in the first year. you'd have a hard time charging two or three thousand dollars for it -people would just feel like they were being gouged. $300 or more for it. There is simply a limit to what consumers perceive as "fair". Let's say that your widget above saves the typical customer $1. Value-based pricing . say. A little market testing will help you determine the maximum price consumers will perceive as fair. you should probably be priced higher than most of your competition.There are certain "price points" (specific prices) at which people become much more willing to buy a certain type of product.  Fair pricing . Dropping your price to a popular price point might mean a lower margin. giving you again a price of $60 per unit.000 invested in the company.  .000 profit on 1. since they would get their money back in a matter of months. energy costs. If you want to signal high quality.Price your product based on the value it creates for the customer.000 in value. as are entree or snack items under $1 (notice how many fast-food places have a $0. you could easily charge $200. because it's "one bill" that people commonly carry. you must take into consideration the consumer's perception of your price. For example. you must be priced lower than your competition. You want to recoup all your investment in the first year. In that case.99 "value menu"). If your sales forecast is inaccurate. If it's obvious that your product only cost $20 to manufacture. even if it delivered $10.

Your price should almost never be lower than your costs or higher than what most consumers consider "fair". the pricing strategy has been to be the lowest price provider in the market. if people won't readily pay enough more than your cost to make you a fair profit. This may seem obvious. How can you cut your costs substantially? Or change your product positioning to justify higher pricing?  Pricing is a tricky business.3  You have to make a living. Larger competitors with deep pockets and the ability to have lower operating costs will destroy any small business trying to compete on price alone. The highest price in the market may not be the ceiling price. You're certainly entitled to make a fair profit on your product. . and even a substantial one if you create value for your customers. you need to reconsider your business model entirely. Ceiling Price: The ceiling price is the highest price the market will bear. Small business owners can ensure profitability and longevity by paying close attention to their pricing strategy. Survey experts and customers to determine pricing limits. buyer's perception of quality. Look at the whole package they offer. something is ultimately worth only what someone is willing to pay for it. Commonly. your profit has to be enough for you to live on and still have money to reinvest in the company. Competitive Analysis: Don't just look at your competitor's pricing. in business plans I've reviewed. Low elastic demand depends on limited competitors. Lowest Pricing Does Not Win Having the lowest price is not a strong position for small business. This approach comes from taking a quick view of competitors and assuming you can win business by having the lowest price. Have you figured salary for yourself in your costs? If not. you can then have a higher ceiling on prices. but many entrepreneurs seem to miss this simple concept. Simply put. Are they serving price-conscious consumers or the affluent group? What are the valueadded services if any? 2. Avoiding the low price strategy starts with looking at the demand in the market by examining three factors: 1. either by miscalculating costs or by inadequate market research to determine fair pricing. and consumers not habituated to looking for the lowest price in your industry. Price Elasticity: If the demand for your product or service is less elastic. Pricing strategies for small business The pricing strategy of your small business can ultimately determine your fate. 3. But remember.

consider your price decisions. Carefully. Large companies in particular are confronting and shaking up established markets in their bid to carve out more sales in an ever-shrinking economy. Leave the price-cutting and price wars to big business. It is now one of . Avoiding a Price War A price war can wreck havoc in any industry and leave many businesses. a new distribution service offering industrial and research supplies as well as equipment and materials to business. However. More companies are looking for opportunities to grow their business by moving into new sectors. 2012 Ed Farquhar looks at how smaller companies can beat bigger competitors by taking a fresh look at their sales and pricing strategies. size doesn't always matter. In the early 90's. out of business.  Branding: Develop your brand name in the market. for example. there have been concerns amongst mid-market distributors that smaller businesses simply won't be able to compete with a company offering the low prices and sheer scale that Amazon so easily provides. In less than 18 months. Brand name businesses can always stand strong in a price war. over 60% of the retailers were out of business while my division went national.  Value-added: Find value your business can add to stand out in the marketplace. Since its launch in April 2012. The low price strategy is best avoided by small business but there are conditions such as a price war that can drag a company into the lowest price battle.com started off as a small company with a radically different approach to selling software. Be the most unique business in the category. Profits were plentiful but a price war took the gross margins from 42% to 12%.  Drop High Maintenance Goods: There may be products or services in your business that have high customer service and maintenance costs. Small businesses with solid pricing strategies can escape a price war and low price position. I observed the competitive exercise equipment market enter a price war in a large city market. Salesforce.4 Once you understand the demand structure in your industry. How Small Firms Can Compete with Big Companies Through Better Pricing August 14. Take Amazon Supply. review your costs and profit goals as set in your business plan or financials. Your business depends on it. This can have implications for small and medium-sized enterprises that are already in these markets. as SME leaders and entrepreneurs know. Drop the unprofitable lines and find out what customers don't want. Take these tips to evade a deadly price war:  Enhance Exclusivity: Products or services that are exclusive to your business provide protection from falling prices.

How do they do this? The introduction of large newcomers. When it comes to companies looking for more complicated. research has proved that 75% of parts are not appropriately priced. A modern pricing strategy has to be dynamic and keep up with the many changes and fluctuations that occur on a day-to-day level. Variability in global economies and market conditions. It is also essential for understanding and managing more complex orders and sales processes: what does the customer really want and what offerings really close sales? Many factors make up negotiations and go towards making a deal attractive. Fluctuation in production costs can and should be taken into account in the final deal offered. Offering the best price as part of the overall package does not necessarily mean offering the lowest. they are leaving valuable profit on the table and opening themselves up to exactly the kinds of competition they wish to avoid. consulting services. more frequent deliveries. Many businesses believe that pricing is something they already manage effectively. financing options. When big companies offering low prices enter the arena. lowering cost coverage and focusing on market-based strategies. However. while companies like Amazon Supply can offer low prices. Well-established smaller companies with a strong understanding of their markets know that employing clever strategies and tools will help them compete with larger players and continue to grow. This might include bulk deals. for example. Yet a little precision can go a long way. In so doing. service and support agreements and in-house training. Real-time data analysis is not only important for accurate pricing. a key strategy for smaller companies must be to pay greater attention to their pricing as an essential lever for profitability. such as Amazon Supply. stripping offerings of unnecessary fixed costs. This can result in them reducing margins.5 IT's major players in the cloud computing market. Building the right deal also helps customers spread costs over extended periods of time and helps the seller avoid one-time operational expenses. research has shown that mid-market managers are not giving this essential element of the sales strategy the level of attention it truly deserves. Key to attaining this accuracy is a more analytical approach. The evidence points to smaller businesses needing to take a more scientific approach to their sales to ensure that valuable margins are not overlooked. Using this data is key. as the offer is made on a gut feel. can affect the cost of manufacturing goods. However. this approach fails to deliver a deal based on hard facts about what the customer is willing to pay and under what circumstances they are willing to pay it. did not formally manage pricing and applied a ‘piecemeal’ approach to dealing with their sales strategy. In the parts distribution sector. McKinsey & Company reports that taking action to improve accuracy by as little as one per cent can yield up to an eight per cent increase in profitability. Most SMEs are sitting on a treasure trove of sales data that can help them understand how to scale and right-size their deals. The study indicated that the majority of companies did not have a dedicated pricing team. This approach also often leaves goods and services sub-optimally priced. longer-term offerings. however. for example. The University of South Florida completed a study this year revealing that smaller businesses have the most to gain by focusing in on their pricing strategy. might cause SMEs to try to compete using low prices. Their ability to negotiate deals on hundreds or even thousands of items and tailor complex. smaller and more traditional enterprises can make better business partners. Right-sizing the deal is also essential for smaller businesses. repeat packages means they can concentrate on meeting the needs of the customer and therefore do not have to compete on price alone. .

" COST FACTORS AND PRICING There are three primary cost factors that need to be considered by small businesses when determining the prices that they charge for their goods or services. especially in the realm of employee hours. Turning sales and pricing from an art form into a science is essential to profitability. the marketplace responds rapidly to technological advances and international competition. Real-time. Intelligent pricing is one of the most important elements of any successful business venture.500-word article takes twice as long to complete as another article of the same size because of differences in quality that are often difficult to anticipate ahead of time. A freelance copyeditor may find that one 2. "you must understand your market. from wherever it may come. It enables companies to compete on a more level playing field with much larger competitors. Pricing optimisation is not a tool for big business only. end-to-end pricing strategies give smaller companies business knowledge and power.6 Businesses must focus on gathering and utilising their available sales information and processing it intelligently in order to extract as much significance out of it as possible. only to find that the various costs of producing and delivering that item eliminate most or all of the profit that it realizes on the sale. distribution costs. You must keep abreast of the factors that affect pricing and be ready to adjust quickly. Yet many entrepreneurs fail to educate themselves adequately about various pricing components and strategies before launching a new business. Remember. automating data mining saves resources and gives smaller businesses a framework for systematically guiding strategic business decisions. As the Small Business Administration (SBA) indicated in The Facts About Pricing Your Products and Services. price alone means little if it is not figured within the context of operating costs. A company may be able to command a hefty price for an item. It should also be noted that service businesses often find it more difficult to accurately gauge their costs. It can offer smaller businesses the same kinds of benefits and opportunities for growth that business intelligence and Enterprise Resource Planning have done for larger enterprises in the past. A clear and accurate understanding of real costs will lead to better profit margins and a more effective way to head off the competition. Smart small business owners will weigh many marketplace factors before setting prices for their goods and services. After all. When staffing is limited and time is precious. and competition. .

this expense can apply to both goods and services. Examples of fixed expenses include rent. regardless of a company's business fortunes. subscriptions. OVERHEAD COSTS Overhead costs are costs that cannot be directly attributed to one particular product or service. Overhead expenses are typically divided into two categories—fixed expenses and variable expenses. retirement benefits. As with labor. advertising. and sealer as material costs. In the case of goods. for example. human resource personnel. A deck builder. taxes. building parts. would include such items as lumber. etc. A certain percentage of employees usually fit in this category as well. business memberships. the wages and benefits accrued by general support personnel—janitors. material costs refer to the costs of the various components that make up a product. insurance. receptionists—are included as overhead. attorneys. while material costs associated with services rendered typically include replacement parts. however. damaged merchandise. and other benefits. accounting costs. need to keep in mind that the "cost of labor per hour" includes not only hourly wage or salary of the relevant employees. membership dues. and depreciation on fixed assets. Some business consultants simply refer to overhead costs as those business expenses that do not qualify as labor costs or material costs. accountants. employee discounts. unemployment compensation. transportation. and insurance.7 LABOR COSTS Labor costs consist of the cost of the work that goes into the manufacturing of a product or the execution of a service. Fixed expenses are regular (usually monthly) expenses that will not change much. utilities. heating andlighting expenditures. clerks. These costs include indirect expenses such as general supplies. depreciation. nails. These fringe benefits can include social security. rental or leasing costs. MATERIAL COSTS Material costs are the costs of all materials that are part of the final product offered by the business. While the wages and benefits received by an assembly line worker involved in the production of a specific product might well qualify as a labor cost. insurance. but also the costs of the fringe benefits that those workers receive. Direct labor costs can be figured by multiplying the cost of labor per hour by the number of employee-hours required to complete the job. workers compensation. Variable expenses are those expenses that undergo greater . Business owners.

COST OF GOODS SOLD One of the most important tools that accountants and entrepreneurs use to gauge the health of businesses is the "cost of goods sold. PRICE BUNDLING This is the practice of giving the customers the option of buying several items or services for one price. or if profit margins swell because of special purchase deals or sudden surges in product popularity. mailing and advertising. but it may vary significantly if increases in the prices paid for merchandise cannot be offset by increases in sales prices. Expenses that are more heavily predicated on company revenues and business owner strategies include office supplies. The figure usually bears a close relationship to sales. A furniture retailer. competitor advertising. and employee bonuses. which may be able to offer a lower price for any number of reasons. communications (telephone and Fax bills). might offer customers a sofa and love seat combination at a price that is somewhat lower than what the two goods would cost if bought separately. a landscaper might lure customers by offering two free months of lawn maintenance with any major landscaping . MANUFACTURER'S SUGGESTED RETAIL PRICE Many small businesses prefer to simply price their goods in accordance with the manufacturer's suggested retail price. PRICING STRATEGIES Small businesses have many different pricing strategies from which they can choose. An ill-considered decision can place a heavy burden on the business. Delivery and freight charges are typically included within this equation. and sales.8 fluctuation. that this strategy—such as it is—is utterly heedless of the competition. however. Critics note. Cost of goods sold provides business owners with a rough measurement of their gross profit margin. They thus eliminate costs associated with making their own pricing decisions or pursuing more proactive pricing strategies. Similarly. for example. depending on variables such as time of year (for seasonal businesses). but they need to select carefully." This figure is in essence the business's total cost of manufacturing the products it sells or —in the case of retail firms—its total expenditures to purchase products for resale.

shampoo. for instance. meanwhile. Third. Business owners who choose to follow this course. since the nature and quality of services offered can vary so widely from business to business. if only as a general pricing guideline." Competitive pricing among service-oriented businesses. Whereas price bundling is more commonly employed for big-ticket items. then highlight other competitive factors. Instead. price products based on your local small-store analysis. and overhead costs (the "cost") and then adding the desired profit (the "plus"). especially for service-oriented businesses: "The cost structure of most service companies is such that providing an additional service costs less than providing the second service alone….9 job. popular with manufacturers. like personalized customer service and convenient location. "because they can buy in larger volume and their cost per unit will be less." MULTIPLE PRICING Similar to price bundling. A grocery store that offers two boxes of macaroni and cheese at a single price. multiple pricing is the practice of selling multiple units of an item for a single price. material. Leonard Berry and Manjit Yadav noted in Sloan Management Review that bundling has several advantages. A second benefit of bundling that appeals to customers is purchasing related services from one service provider. it is often employed. Still. however. is engaged in multiple pricing. household cleaning products. COST-PLUS PRICING This methodology. bundling effectively increases the number of connections a service company has with its customers. . should make sure that they look at competing businesses of similar size and strength. multiple pricing is usually used to sell inexpensive consumable items such as razor blades. is a hazier proposition. and food and beverages." noted the SBA's The Facts About Pricing Your Products and Services. involves adding together all labor. "It's very chancy to compete with a large store's prices. COMPETITIVE PRICING Some small business owners choose to base their own prices on the prices of their principal competitors. They can save time and money by interacting with an paying one provider rather than multiple providers.

attractive return policies. keep labor costs down. 3) exclusive merchandise. obtain good prices from suppliers. however. In settings in which price is not the customer's most important consideration. though others use it as well. Such prices rarely reach outrageous levels. Some business owners also boost prices in markets that have few competitors. These benefits can take the form of: 1) convenient or exclusive location. 2) social status. speed of service. Advantages sometimes . but they can become sufficiently high that enterprising entrepreneurs will recognize an opportunity to undercut the business with more inexpensively priced goods or services. keep major operational expenses such as facility leases and equipment rental under control. Indeed. The latter can take the form of home or office delivery of goods. service and/or product knowledge. then this pricing strategy is obviously doomed to failure. is to provide customers with added benefits that justify paying the higher price. say experts. some small businesses can do quite well employing this strategy. PRICE LINING Companies that engage in this practice are basically hoping to attract a specific segment of the community by only carrying products within a specified price range. reasoning that the community has little choice but to buy from their businesses.10 PRICING ABOVE COMPETITION If a business is operating in a community in which low prices are most customers' primary concern. provided they keep their operating costs down and do not spark a price war. This strategy is often employed by businesses whose goods/services or location are likely to attract upscale buyers. and 4) high level of service. Commonly employed by major discount chains such as Wal-Mart—which can do so because its purchasing power enables it to save on its costs per unit—this strategy can also be effectively used by smaller businesses in some instances (though not when competing directly with Wal-Mart and its ilk). PRICING BELOW COMPETITION Pricing below competition is the practice of setting one's prices below those of its competitors. and make effective use of its pricing strategy in all advertising. The key to making "pricing above competition" work. the smaller profit margins associated with this pricing strategy make it a practical necessity for participating companies to: exercise tight control over inventory. and friendly atmosphere.

still.11 accrued through price lining practices include: reduced inventory and storage costs. Business environments can change quickly. It is the practice of pricing goods and services at prices such as $9. Analysts note. ease of merchandise selection. 2) when . and the successful entrepreneur will learn to change his or her pricing strategies accordingly. and that it can leave businesses particularly vulnerable to economic trends. author of The Entrepreneur and Small-Business Problem Solver. REVISITING PRICING STRATEGIES Since pricing is one of the single most important factors in determining whether a business will be successful. and enhanced status.95 (rather than $10) or $79. This little morsel of pricing psychology has become so universally employed that many observers question its value. small business owners should continuously review their pricing policies to make certain that they remain in keeping with marketplace realities. FACTORS IN ARRIVING AT A PRICING STRATEGY Entrepreneurs encounter numerous considerations that should be weighed when assigning a price to their goods or services. Other commonly used pricing policies include penetration pricing and skimming pricing (for manufacturers) and loss leader pricing (for retailers). described six different circumstances in which small business owners should review their pricing and make changes if necessary: 1) when introducing a new product or product line. These considerations range from the needs and desires of target consumers to general economic conditions. ODD PRICING Odd pricing is used in nearly all segments of the business world today. that this strategy frequently limits the company's freedom to react to competitors' pricing strategies. the practice remains widespread across the United States (and elsewhere). William Cohen.99 (rather than $80) because of the conviction that consumers will often round the price down rather than up when weighing whether to make a purchase. however. The SBA cited the following factors as among the most important to consider when arriving at a pricing strategy.

5) when general economic conditions become inflationary or recessionary. business owners. and other people engaged in the world of commerce have long recognized that historical events can help business owners evaluate current business plans and propose future strategies. the price of a dozen eggs is many times higher today than it was 50 years ago. we must be careful to correct for inflation when comparing prices across time. In absolute terms. however. RAISING PRICES Small business owners are often reluctant to raise prices once a good baseline price has been established. including pricing strategies. REAL PRICE AND NOMINAL PRICE Economists." Such comparisons are meaningless. a lot of businesspeople are tempted to forgo price increases altogether. however. "we often want to compare the price of a good today with what it was in the past or is likely to be in the future. as Robert Pindyck and Daniel Rubinfeld observed in Microeconomics. "Your profit margins will be shrinking….4) when competitors change their prices. is defined as the price relative to an aggregate measure of prices (usually the Consumer Price Index-CPI). The real price.12 testing for the best price. Percentage changes in the CPI measure the rate of inflation in the economy. You're gradually undermining the . 6) when weighing major changes in sales strategy. it is actually lower. unless those prices are measured "relative to the overall price level. 3) when attempting to break into a new market. They worry that a price increase will alienate customers and drive them to the competition. If you do either one. Indeed. but relative to prices overall. or at least put them off for as long as possible. This means measuring prices in real rather than nominal terms. Therefore. you're making a big mistake. Indeed." Norm Brodsky wrote in Inc. any significant change in any aspect of a business's operations—from rising costs of raw materials to changing insurance premiums—should spark a review of company pricing strategies. "Faced with such resistance. noting that the nominal price of a quart of milk was 40 cents in 1970 and about 80 cents in 1990. however." Pindyck and Rubinfeld go on to define the nominal price of a good (its "current dollar" price) as its absolute price.

Plack wrote in the Baltimore Business Journal. guarantees. and utilities—tend to rise every year. In addition. customers typically base their purchase decisions on more than just price. Target. insurance. however." SURVIVING COMPETITORS' DISCOUNT PRICING STRATEGIES Major discount stores such as Wal-Mart.13 perceived value of your services or products. slowly cutting into profit margins. "The message for companies is clear. Many small business owners have felt the impact of these stores—indeed." Brodsky noted that many of a small business's costs—such as payroll. customers tend to associate price with quality. that some small business failures that occurred in the wake of these titans' arrivals could have been avoided if small business owners had adopted different strategies to deal with the new competitive environment in which they . and Circuit City have gained control of large blocs of the American business world over the last several years on the strength of their one-stop shopping and discount prices. and personal desires. Best Buy. as Harry J. the latter a result of their ability to buy goods at bulk rates. In addition. cautionary tales concerning the impact that such stores can have on formerly vibrant downtown shopping areas have proliferated in recent years. In order to make an effective price increase. Other factors influencing the decision process include quality." Scott wrote. Staples. Sam's Club. A business that does not increase prices to keep up with the competition risks being regarded as the cheap alternative in the marketplace. Howard Scott of Nation's Business recommended conveying the reasons for the increase to customers and giving them a perceived increase in value for their money. Office Depot. features. K-Mart. When price increases are implemented gradually and cautiously. people will always pay more for good. reliable customer service. Many observers believe. After all. "Those that differentiate their products from the competition's and are able to articulate that difference to customers are more likely to be able to raise prices—and keep them raised—above the competition's. small businesses may be able to keep their customers happy while also keeping their profit margins intact.

the SBA cautioned entrepreneurs to "remember that the image of your business is crucial to obtaining and keeping the clientele and that your pricing structure and policies are a major component of your image. the bulk-rate buying power advantage that the big stores enjoy is simply too great to overcome." Read more: http://www. etc. generous return policies.14 were operating.com/small/OpQu/Pricing.html#b#ixzz2PgIWtB1A . Indeed." concluded the SBA in its Pricing Your Products brochure. "is to have a well-planned strategy and established policies and to constantly monitor prices and operating costs to ensure a profit.) Define your market segment or niche and devote energies accordingly Control inventory Streamline to eliminate less profitable areas of business Target advertising and promotions to reach the most likely customers Steer customers to the most profitable aspects of your business Establish your business's industry knowledge as an additional resource for customers Build strong relationships with vendors Meet or beat prices of big discounters on selected lead items or services Make intelligent use of price strategies such as price bundling." Finally. Effective strategies that can be used to help negate the discount pricing strategy employed at the big chains include:   Emphasize value and personal service rather than price Offer attractive ancillary services (home and office delivery.referenceforbusiness.          Of course. But they contend that many small businesses can still co-exist with these titans if their owners outmaneuver the big stores in other areas. "The key to success. economists and business analysts agree that most small businesses cannot compete with large chains in the area of price. pricing remains a very big component in determining a company's success or failure.

The GPS fleet procedure will give indications as to where your car is located. Some of are you perhaps view. if somebody were to ever rob your car. You can believe your vehicle to be innocent even with the newest of employees. with the help of this approach. Thanks to the approach.com/small/OpQu/Pricing. What do I mean by third eye? Well. you would be able to locate it. If you are in businesses that can make use of the GPS Fleet Management technique. cargo that gets stolen Emerging Trends In Management so often.15 Read more: http://www. They will also find it obliging where gas is disturbed. don't think double about its usefulness. the owners of these businesses can lie in stillness and not be tensed about where their vehicles headline. should it have a GPS fleet management procedure installed. It is definitely meaning the investment. It actually machinery like your third eye. you cannot just narrow such happenings but can avert them from ever charming place again. EMERGING TRENDS IN PEOPLE MANAGEMENT .html#b#ixzz2PgICWnxx EMERGING TRENDS IN MANAGEMENT Emerging Trends In Management : GPS fleet management is one of technologies great inventions. you will know at all time where your vehicle is. Now. wares. it plant like a detector. Consider the quantity of cars. will definitely find it expedient. From the comfort of their homes. they will know if their vehicles have done specially mileage. they can have a alert Emerging Trends In Management eye on their machinery. Take for instance your automotive assets. Thus selection you to find your car and work as a third eye.referenceforbusiness. Anybody in-indict of delivering important payload or transporting pricey wares or in the trek dealing. You have perhaps figured out by now that this logic goes past just the wellbeing of your vehicle. I don't essential it for my car. what besides could you maybe use a GPS Fleet Managementroutine for? Well not all of us but many of us could make use of it. you can be respite poised that no one will be able to cheat you of your vehicle or supplies.

employees continue to enjoy more choice of where to work. While the price of information has dropped. and avatars. Human beings are now integrated into reality quite differently than before. Business Trend: The Frugal Consumer Consumerism will not be the same following the great recession. They no longer plan to stay with a company for life. details several innovative practices and insights being utilized to address these challenges by best companies from across the globe In times of great upheaval in society. The mixture of people in the workforce is evolving too. leading to increased job-hopping and cross-fertilisation of workplace cultures. Despite the global recession. published in Swiss Business. The emergence of earth shattering business trends redefines the way business is conducted and profits are realized. the supply of data has exploded creating information inflation and a whole set of new problems for the future.16 The nature of work is changing in ways that require innovation in how leaders engage and manage their workforces. blogs. For businesses to compete. We have entered an era of the frugal consumer according to economist Peter Dawson. they will require skills and technology to find the truly valuable data in a universe of exploding content. Business Trend: Information Inflation Information has never been so free and readily available as today. They can instantaneously write to millions. They engage in the real time writing of instant messages. the very foundations of life and business undergo changes that transform industries and companies. wikis. In response to these challenges. resulting in co-workers being widely dispersed and working at different times of the day. Technology has created virtual workplaces. “Information inflation reflects the fact that civilization has entered a new phase. This article. The following four business trends will reshape business and society. the best workplaces focus not just on workers’ basic economic and security needs.” stated by George Paul in Information Inflation: Can the Legal System Adapt? Information forms the basis of decision making. . but on creating meaningful work and supportive social networks for employees. He views this as a shift towards a more permanent condition of consumerism which will change the way businesses operate. spanning generations and geographies with a demographic more diverse and reflective of the communities where companies are located. One such industry grappling with this trend is the legal system.

Top 10 Small Business Trends for 2011 ***Update: our Top 10 Small Business Trends for 2012 is now available. and moderate overall U. click on the year: 2010.*** Continuing our annual tradition. unemployment will remain stubbornly high. also known as Generation Y. solar. Our overall economic outlook is for continued moderate growth with U.S. economic growth in 2010. the earth friendly companies in bio fuels.S.17 Companies of all sizes will need to re-evaluate old business assumptions and adapt to new conditions. With billions in government stimulus and venture capital. the small business sector of the U. 2009. Business Trend: Clean and Green Green business is nothing new yet what is different is it’s now becoming a central business movement for many companies including the stodgy automakers. wind and more will stand to reap big rewards going forward as the face of commerce changes for the benefit of Mother Earth. The Small Business Economy Recovers from the Great Recession: Despite the Great Recession officially ending in 2009. the green movement has accelerated into overdrive.2%. below is our Top 10 Small Business Trends list for 2011. To see our past lists. 2008. This cohort has lived the digital life and their entrance into the workforce has enabled them to be more adaptable. Howe sees us entering a crisis point and the Millennials will lead the country out of this mess. collaborative and innovative than any other generation. What we see now is an entire restructuring of the world as we know it. Business Trend: Mighty Millennials Millennials. finishing the year around 9. Economic 1. These four business trends will pose a challenge for business and society as a whole. Business will need the agility and adaptability to ride these trends into the future. Neil Howe has been a great predictor of generational impact on American society.S. classes and community. Businesses will have to embrace the youth unlike never before. People of all income and demographic levels are reducing compulsive spending and carefully looking for value and products that provide greater meaning to their lives. We're optimistic the economy will continue to improve in 2011 and economic . While we expect hiring and the job market to improve. GDP increasing 3%-3. What’s more earth shattering about this generation is their diversity and how they embrace all cultures. born between 1978 and 2000 are 75 million strong. Given a presidential push.5%. was still in recession last year.

capital will still be tight in 2011. resulting in the small business economy emerging from the Great Recession. including 200 million mobile users. Social Media Moves to the Small Business Mainstream: Despite the hype. Social and Social Media 5. Small businesses are embracing and adopting Facebook as a key part of their web presence. positive results from their social commerce/media efforts. Manufacturing: The recovering economy and 4 key trends are driving the growth of small and micro manufacturing. 2011 will see this this field continue to explode as small businesses see clear. sell and support customers. With over 500 million active users.18 growth will be more widespread. The growth of social commerce (see 6 below) and Facebook (see 7 below) are key drivers of the growing interest in and use of social media by small businesses. 3. community lending. bootstrapping and business flexibility in 2011. Social Commerce:The amazing growth of Groupon and other social commerce sites in 2010 heralded the shift towards the integration of social media and sales. redefining how we think about manufacturing: (1) technology and variable cost business models are making it cheaper and easier for small and micro businesses to manufacture niche and customized products. crowd funding. Facebook has passed Google and become the Web's most visited site.S. 4. micro-lending. its benefits become clearer. and social media's positive results become more obvious. Alternative Financing: While the improving economy is leading to increased small business access to financing from banks and other traditional sources. This will lead to increased use of alternative credit sources merchant advances. the vast majority of small businesses haven't used social media on a regular basis for business purposes. 7. (2) the weak dollar and rising overseas costs are making U. factoring. Online micro-lending in particular will see a substantial increase in 2011.S. 2. manufacturing cost competitive. Variable Cost Business Models: Small businesses will continue to focus on cost containment. 6. and (4) the Internet and online systems are improving the ability of small manufacturers to find. Fixed costs and fixed assets will increasingly be avoided. Small Businesses Friend Facebook: The epic growth of Facebook is hard to overstate. measurable. . adopting a payas-you-go approach to minimize cash requirements and increase business agility. etc. Small Firms Reinvent U. (3) developing world economic growth is leading to stronger export opportunities. In 2011 small businesses will see stronger demand and better business conditions. More small businesses will shift from fixed cost to variable cost business models. This is changing as small business users become more comfortable with social media. Small business outsourcing and the use of contingent workers in place of full time employees will increase substantially. and in growing numbers using Facebook as their primary website.

It is a long-term trend whose impact has been accelerated by the recession and makes the list again this year because of its growing importance. Working in the Cloud: No trends list would be complete without mentioning mobile. 10. 9. Work is moving to the cloud. the growing convergence of these trends and technologies is amplifying their impact and fundamentally changing how business is done. part-timers. temps and contractors. Both groups will increasingly see themselves as long term freelancers and realize to be successful they will need to view themselves as small business owners. New localism was on our list last year. new technology. This shift in thinking will improve their businesses and result in a stronger. cloud. and small businesses are embracing this shift and related technologies. more Americans are focusing on their families.19 8. While each of these trends is important. we are going to limit our technology trends to one broad trend. New Localism Continues to Flourish: Driven by changing demographics.freelancers. . Technology We see 2011 being a year of technology maturation and consolidation. friends and local communities. more successful freelance community. local and social computing. economic pressures and growing concerns about the environment. Small businesses benefit from the growing number of locally-oriented customers and the opportunities created through "Buy Local" campaigns. Others will stay contingent due to a lack of options. By that we mean a number of technologies that have been impacting small businesses for several years are becoming mature and mainstream. Because of this. Many of these new contingent workers are embracing freelancing and choosing to stay contingent. Freelancers Realize They're Small Business Owners: The last few years have seen strong growth in the number of contingent workers .