How to set a price for your product (part 2)

Sometimes a price must be decided. A high price creates resistance. It tends to limit ones field. The cost of getting an added profit may be more than the profit.

It is a well-known fact that the greatest profits are made on great volume at small profit. Campbell’s Soups, Palmolive Soap, Karo Syrup and Ford cars are conspicuous examples. A price which appeals only to – say 10 percent – multiplies the cost of selling.

But on other lines high price is unimportant. High profit is essential. The line may have a small sale per customer. One hardly cares what he pays for a corn remedy because he uses little. The maker must have a large margin because of small consumption.

On other lines a higher price may even be an inducement. Such lines are judged largely by price. A product which costs more than the ordinary is considered above the ordinary. So the price question is always a very big factor in strategy.

Competition must be considered. What are the forces against you? What have they in price or quality or claims to weigh against your appeal? What have you to win trade against them? What have you to hold trade against them when you get it?

How strongly are your rivals entrenched? There are some fields which are almost impregnable. They are usually lines which create a new habit or custom and which typify that custom with consumers. They so dominate a field that one can hardly hope to invade it. They have volume, the profit to make a tremendous fight.

Such fields are being constantly invaded. But it is done through some convincing advantage, or through very superior salesmanship-in-print.

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