How to price a product or Service? – Starting a business In Ireland
Going through Dublin Airport the other day I noticed this “special offer” sign… wow an Irish brekfast for only ¢11.60!
Why not give the poor tourists who have been ripped off around the country a final kick in the arse as we send them on their way?
This got me thinking about the whole area of pricing your product or service..basically the options are apply a standard margin and trade away or slash your margin and go for volume. For example our freinds at Dublin airport could have chosen a Special offer Irish brekfast at ¢5.99 this may result in a much busier operation with more throughput and presumably additional add on sales as people go through the establishment.
A recent article in the Sunday papers with a successful banker now entering the UK market also caught my eye, his opinion was that “profit is in volume” (at a tight margin). Certainly the most successful companies in retail in particular apply the stack em high sell em cheap principle. Once you get the ball rolling your increased purchasing power allows you to take additional margin and advantages the trick is to not let your overheads gobble you up before you get traction.
With my new business I am pushing for the volume & value principle so I will find out soon enough if it is the way to go. Consumers are however flooded with special offers so if you are selling something “on Special” it should be something that the consumer can relate to as being good value i.e they have bought a full Irish before for around ¢8 and now it is on offer for ¢5.99 hmmm not bad.
Right all this talk of breakfast is making me hungry, any opinions on the above are welcome….now what shall I have? not a full Irish anyway..