The Impact of Price Popularity on Profits

The goal of almost every business owner is to generate a profit either for themselves or their shareholders. This can be challenging at best. So much thought and effort go into running a business, accounts payable, accounts receivable, dealing with vendors, customers, etc. Because of this people sometimes do not focus on one of the most important factors- pricing. Knowing how much you can charge for your product or service is invaluable information. Businesses typically want to increase volume and prices at the same time. In a perfect world that would be easy to accomplish, yet we do not live in a perfect world. So just how do businesses go about deciding how much to charge for a product or service?

One way that businesses do this is through trial and error, by seeing how much they can charge before volume starts to drop off. This is a very ineffective method, but is practiced by more businesses than you may realize. Another method is determining what percentage of profit over cost that you want. Perhaps you sell automobiles and decide that you require a profit of 5% on every car that is sold, and then you price accordingly. While this method is good for determining if you are going to cover overhead and other expenses, it may not be the best way to increase sales. A person can spend weeks trying to determine the correct price for their products and services. Economists have many formulas to determine price elasticity, market demand, and cost shifting. All of these economic formulas can be helpful, but are very time consuming and sometimes require hiring a consultant.

There are some easier ways to go about setting prices. Once you have determined a 'ballpark' price that covers your costs, you can begin adjusting it up or down to maximize profits. A relatively new concept that is garnering a great deal of attention from businesses big and small is the concept of price popularity. Price popularity is just what the name implies, looking at how popular, or how frequently a price is used. For example, surely you have noticed how many commercials on television sell items for $19.95. This is a very popular price when compared to $19.77. Do you see many products priced at $19.77? The frequency in which consumers see a price has a strong effect on their purchasing decisions.

Knowing about price popularity, and how to apply it, can help turn a slow selling item or service into a highly demanded item or service. Should a business set a price at $19.99 or $19.95? Does a price read differently to a consumer if it appears as $72.00 or $72? Research shows that it does in fact affect a consumer's decision making. Gaining access to the research that shows the most popular prices, the ones that consumers feel most comfortable with, is a precious resource to a business. This is much easier than spending the numerous hours of financial analysis to make an educated guess at what volume business will drop off if you raise or lower the price by a mere few cents.

The more a business owner knows about pricing strategies the more successful they will be in generating profits. Incorrect pricing can have devastating effects on a business. While many spend time trying to determine a break-even analysis and price elasticity, how many have really considered the psychological appearance of a price and the popularity of that price.

In today's extremely competitive business world a business owner needs every advantage they can get to outwit their competition. Researching the information available on price popularity simply puts a business one step ahead of their competitors.

About The Author

Konstantin Goudkov studies the psychology of pricing, ways to manipulate prices for maximum profit, and tactics to control consumer price perception.

You can find his latest report at: http://www.pricepointreport.com

Lincoln Stretch rentals Alsip ..
In The News:

The rollout of Apple's iOS 17 brought a subtle "Rebound" notification tone that's gotten some criticism. Kurt "CyberGuy" Knutsson explains a fix.
Fitness centers and workout studios are starting to establish policies that prohibit shooting phone videos to protect people's privacy.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents
Apple recently notified a small number of iPhone customers in 92 countries that their phones may be under attack by mercenary spyware.
An artificial intelligence-powered home security system can fire paintballs and tear gas at trespassers. The camera identifies human faces and animals.
Technology expert Kim Komando gives her tips and tricks on enhancing your user experience a smartphone and other devices you use everyday.
A new camera called NUCA uses artificial intelligence to create deepfake photos of subjects by stripping away clothing in close to real time.
The Kimberley Kube trail-ready camper has a compact but spacious design and combines luxury, functionality and ruggedness for a weekend getaway.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Emails instructing you to reset your password for an account may be legitimate, or they may be scams. Kurt "CyberGuy" Knutsson explains.
Northrop Grumman's Manta Ray uncrewed underwater vehicle aims to revolutionize undersea missions — it glides through the ocean without human assistance.
Learn how to work Google's calendar application to streamline and organize your daily tasks from technology expert Kim Komando.
If you do not want Facebook to have automatic access to your private photos, follow our tips to protect yourself. Kurt “CyberGuy" Knutsson shows you how.
Kurt “CyberGuy" Knutsson goes into detail about Apple’s recent iOS update that allows iPhone users to instantly translate spoken language simply by using the Action Button.
Safeguarding your digital life with a reliable physical backup isn't just a precaution, it's a necessity. Kurt “CyberGuy" Knutsson provides the essential backup checklist.
Kurt “CyberGuy" Knutsson reveals how a Redditor exposed false recycling claims at their apartment, highlighting a report that only 21% of U.S. recyclables are processed.
Kurt "CyberGuy" Knutsson offers a travel toolkit featuring five technology tools to help you with booking flights and hotels for your summer vacation.
The bubble behind the clock on your iPhone can appear in different colors. Kurt "CyberGuy" Knutsson explains what each of those colors mean.
Scammers are using the power of artificial intelligence to mimic voices of people and are using the fake voices to commit crimes, like kidnappings.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Tech guru Kurt "CyberGuy" Knutsson explains the science behind the Invisibility Shield, a 6-foot shield that makes people become invisible.
The International Olympic Committee on Friday announced plans to use AI in various Olympic aspects, including athlete identification, training and judging.
Tech guru Kurt "CyberGuy" Knutsson explains an easy trick to avoid squinting while working or surfing the web by zooming in on your personal computer.
Streaming giant Roku has recently been targeted by a pair of cyberattacks, and the company confirmed over a half million Roku accounts were compromised.
The Land Aircraft Carrier combines an all-terrain, six-wheeled vehicle with a two-seat aircraft, which features electric vertical takeoff and landing.

Be Like Bill - Think!

Twice a year, Bill Gates goes to a remote island... Read More

The Chief Cause of Business Failure & Success

Business rises and falls on leadership. According to business guru,... Read More

Thinking Like A Farmer

One of the difficulties we face in our industrialized age... Read More

The Chasm of Change---- Restructuring ----- The Goliath

Richard L. Daft one of the country's recognized academic leadership... Read More

Mastermind Your Way to Success

What do Mark Victor Hansen, Robert Allen, Anthony Robbins, Andrew... Read More

Microsoft Great Plains Implementation: Pharmaceutical Corporation Specifics ? overview

Microsoft Business Solutions Great Plains serves mid-size and large clients... Read More

The 7 Critical Steps to Formulating Your Annual Strategic Business Plan

Businesses tend to avoid doing their annual business plan thinking... Read More

Business Plans Keep You On The Success Course

Where would your business be without a proper plan? A... Read More

Business Problem Solving

Is there really anything as a problem? Does chaos or... Read More

For Business Owners Only - You Can?t Be Fired But Neither Can You Quit

The decision to sell, or not to sell your business... Read More

Business Plan 101 How to Write a Table of Contents

No matter what business you plan to start in your... Read More

Top Reasons To Form A Strategic Business Alliance

A strategic alliance is when two or more businesses join... Read More

Advice To Manufacturers Creating A Business Plan

If you are a manufacturer wanting to use your business... Read More

How to Start A Business Plan

A business plan precisely defines your business, identifies your goals,... Read More

Online Promotion: 10 Ways To Use Focus Groups To Ignite Your Profits

A focus group is a group of employees or current... Read More

The Power of Strategic Thinking: Creating Meaningful Success

Too much goal setting and strategic planning can leave you... Read More

Art of Succession Planning

Succession planning, like any business acumen, is both an art... Read More

Designing an Efficient Distribution System

Let us look at a few of the big distribution... Read More

Parking Business, the Details on Increasing Lot Revenue

If you are in the parking business and own or... Read More

Innovators Role at Hard Times

One Research Scientist at the Hewlett-Packard (HP) Imaging Systems laboratory... Read More

Vendor Relations Strategies Sample Outline

One of the quintessential parts to any business is your... Read More

6 Steps To Laying Out Your Competitive Strategy

Why do so many companies languish and watch as their... Read More

Planning For The Slow Season Of Your Business To Increase Sales

Every business experiences slower periods. For some, they sell more... Read More

Pave the Way to a Successful Strategic Plan

Many very successful business owners may never have had a... Read More

The Top 10 Priorities That Guard Your Five-Star Reputation

Making money doesn't make your reputation... your reputation makes you... Read More

Western Springs shuttle limo ..