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Index
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“Shipping & Handling Included.”
2.5.6. Price Elasticity
If demand for your product drops when you increase the price by only 1%, you
have a product that is very price-sensitive or price-elastic. If, on the other
hand, doubling the price only causes a slight drop, you have a priceinelastic
product -- that means that it almost doesn’t matter what price you
charge because people will still buy it.
Elasticity is largely driven by customer perception of your product and the
competition. If you are a grocery chain selling your own brand of instant coffee,
your coffee better sell for less than other brand names. Bump that price up
and watch your inventory sit on the shelves. But if you sell a top-line, infashion,
gourmet brand of coffee...
... it can be a license to print money.
What kind of products are price-inelastic? Products that...
• deliver important benefits to the customer.
• offer uniqueness that is understood and valued by the customer.
This is a simplistic explanation of an important concept. Later in this
manual, you’ll see how we generate Price-Resistance or Price-
Sensitivity graphs that will clearly show customer response at every possible
price point.
OK, got your business/pricing model mapped out for your new product? Up to
speed on Pricing 101? Great! Let’s find your Perfect Price™!...
Order now -> http://myps.sitesell.com/
Make Your Price Sell!
3 3
3. The Nuts and Bolts of MYPS!
Price...
... the final frontier (with apologies to Gene Rodenberry and
William Shatner)...
Price is perhaps the most crucial aspect of marketing a new (or upgraded)
product or service. Yet up until now, few companies have been able to use
scientific surveys to determine with certainty the single best price for a new
product, upgrade, or service.
From here on in, we’ll use the word “products” to include new products,
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