How do I know how much to quote?
Knowing how to pitch prices and at what level is always a problem for people preparing proposals.
Some commonly used pricing strategies are:
- Pricing relative to competition
- Pricing relative to costs
- Uniformity of prices for different customers
- List prices
- Geographical pricing
- Price leadership
- Product line pricing
- Competitive bidding policy
You should also be able to set three basic pricing levels for different quality products or services:
- Budget price
- Standard price
- Premium price
Pricing Objectives You should have specific goals and objectives in mind before actually setting the price for your product or a tender or proposal. Some goals and objectives for pricing include:
- Break even
- At what price do we need to sell in order to break even?
- Profit making
- To achieve a target return
- To maximise profit
- Sales oriented
- To increase sales turnover
- To maintain or increase market share
- Status quo oriented
- To stabilise prices
- To meet competition
At what price do we need to sell in order to break even?
Researching and finding further information in regard to prices
- Use industry contacts and your personal network to ascertain how a specific industry prices its requirements and what price levels it might be prepared to pay for certain types of work.
- The results of many government tenders and contracts are available to the public, which you can make comparisons to.