The document discusses various pricing strategies for agricultural products. It describes determining fair pricing by calculating costs of production and distribution then adding a margin. Multiple strategies are presented, including contribution pricing, penetration pricing, skimming the market, psychological pricing, competitive pricing, and differentiated pricing. The conclusion emphasizes finding the right price by maximizing revenue while using common sense.

1. PRICING YOUR PRODUCT:
SETTING THE SALE PRICE
October 18, 2012 – Local Foods Network
James Matson
Agribusiness/Marketing Consultant

2. October 18, 2012 – Local Foods Network Work Shop ©Matson Consulting
JAMES MATSON

3. October 18, 2012 – Local Foods Network Work Shop ©Matson Consulting
PRICING YOUR PRODUCT
• Developing a pricing
strategy can be a long
drawn out affair.
• We can even skip
lunch to learn about
all the processes.
•Or…

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WHAT IS FAIR PRICING?
We can
determine what
is fair pricing.
What is fair pricing?
Whatever the
market will bear.

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THE
END!

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SORRY NOT YET…
• Sorry, there is a bit
more to fair pricing
than that.
• But don’t forget.
• “Whatever the
market will BEAR!”

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WHAT IS FAIR PRICING?
• So, how do we
determine how
much the market
can BARE?

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PRICING STRATEGIES
• Multiple pricing
strategies can be
employed to find the
right price for your
goods.
• Here are some
examples.

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PRICING STRATEGIES
•$0.50
to grow
•$0.25
to sell
Contribution
Pricing is
determining
how much it
costs to bring
the good to
market then
adding a
margin.
$0.75 + Margin

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PRICING STRATEGIES
Penetration
Pricing offers a
low price to get
exposure and
gain wide
acceptance
quickly.

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PRICING STRATEGIES
Skimming The Market is to
introduce the product at a high price
for affluent customers only.
It causes low volume and high
margins which can effect your
company in negative ways.

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PRICING STRATEGIES
Psychological
Prices are
emotionally
satisfying to the
customer.
It is most efficient
when you are
selling directly to
the consumer.

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PRICING STRATEGIES
• Competitive Pricing is to find out
what competitors are selling at, then
match or undercut.
Credit: http://mytechandspace.blogspot.com/

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PRICING STRATEGIES
• Differentiated Pricing is to take
different prices for the same product
in different situations.

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DIAMOND WATER PARADOX
Water Diamonds

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PRICING STRATEGIES
Airline Pricing Model
One
Seat
$59
Another
Seat
$2559

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PRICE-TAKING VS PRICE-MAKING
•A price-taker is an individual or firm
who is not influential enough to affect
the price of an item.
•A price-maker is an individual or
company which is influential enough to
affect the price of an item.

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PRICE-TAKING VS. PRICE-MAKING
• We should always strive
to be price-makers.
• To do this we need to make our
products unique.
• This is done by making substitutes
hard to find for customers.

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WHAT MAKES THESE APPLES
DIFFERENT?

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PRICING AND REPRESENTING YOUR
BRAND
• Pricing can be the
best representation
of your brand in the
marketplace. Rolex Timex

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FAIR PRICING CONCLUSIONS
•Finding the right
price is about
maximizing
revenue.
•Common sense is
the always the best
solution to pricing
your products.

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“Whatever the
market will bear!!!”