Pricing: 6 challenges businesses face and why AI is the answer
Pricing will eventually arrive whether a company has developed a product and is preparing to introduce it to the market or has an idea and is considering how to develop it. But pricing is one of the most challenging, complicated, and time-consuming processes for a product launch. It is also difficult for its re-launch or during the development of an idea. As a result, it causes fear in all businesses.
If the pricing is correct, the companies achieve top results and may dominate the market. However, if not, the product and the company may fail and never reach the target customers. Therefore, two are possibilities in the second situation: The product may not be sold due to the high price, or the company may not profit owing to the low price.
Giving a quick definition of pricing is the market price at which a company's product is sold. A successful pricing strategy indicates that the company will profit from this product and likely dominate the market due to its price and services.
The above pricing definition is quite simple and only reveals some of the challenges a business may face when determining prices. Pricing is a continuous process that requires constant examination of the competition and market trends. There are various pricing strategies that a business may employ, the selection of which is dependent on the business's model, its objectives, and the product itself.
However, even with the abovementioned strategies, there is a high chance that the pricing will fail or not be achieved quickly and effectively.
Pricing strategies may have little results for companies and products because they are the same for all companies. Therefore, it is up to the company to make distinctions in those strategies. For example, a pricing strategy should consider revenue goals, marketing objectives, target audience, brand positioning, and product attributes. In addition, it is beneficial for companies to examine external factors such as consumer demand, competitor pricing, and market and economic trends in general.
Thus, a company may employ pricing strategies, but this does not guarantee success in the pricing arena. All of the above factors must be adjusted within the chosen pricing strategy. This is quite demanding because numerous challenges must be considered.
In addition to those above, 6 additional challenges make pricing complicated and demanding.
The 6 challenges are:
1) Even if companies choose a pricing strategy such as Dynamic, Freemium, Value-Based, Psychological, or even Geographic, they will likely not adhere to it and fail to adapt it to market conditions and company goals. Since theory has been excluded from practice, strategies are models that should be followed in various ways. Thus, the market and business differ significantly from any strategy's theoretical model. Consequently, adaptability and knowledge of the objectives and market are indispensable.
2) Companies frequently do not want their competitors to know how they determine their prices, which causes them to waste valuable time on better and more accurate planning or a more thorough market analysis. With the advancement of technology, it is easy for competitors to comprehend how a business determines its prices or what strategy and outcomes it pursues. Therefore, it is pointless for companies to waste time on this process.
3) Consumers are the ones who will determine a product's true worth. So, why not prioritize their needs and care for them? This is vitally important because it builds trust and enables the company to shape the product's value on the market rather than simply setting prices. In addition, consumers must purchase a product because they understand its value and impact on their lives instead of merely purchasing it because of its price.
4) Besides the aforementioned, companies frequently do not want consumers to understand how they determine product prices. Again, this results in the same outcomes as number two, as businesses waste valuable time concealing their techniques. But the general public has little interest in a company's pricing policy. Specifically, the greater the public's interest in the product, the less likely they are to care about how the company determines the price.
5) Another error companies can make when attempting to determine the optimal price for their product is conflating the opinion and value of the general public and market with that of their target market. This occurs because the company may have needed to take the time to identify its target market or make a mistake, rendering the entire pricing process ineffective.
6) As previously stated, companies should emphasize a product's potential market and consumer value more than its final price. This implies that the company must place itself in the shoes of its consumers or target market and begin to view itself through its eyes. Often, the company's goals and desires may differ from those of the consumers, but only by doing so will the company be able to add value to its products and create pricing that meets consumers' demands.
All of the issues above may appear daunting and impossible for an organization. However, there is a tool that can strengthen a company's entire pricing strategy and easily shape prices while considering all of the above: Artificial Intelligence.
How can businesses use Artificial Intelligence, and is there a simple, quick, and trustworthy tool? devToM provides the solution that all companies require by bringing them closer to AI.
Who said that Artificial Intelligence is only for large corporations, or is it an expensive technology that will be widely adopted in the future? With devToM, businesses do not need to wait to enjoy future technologies because they can do so immediately.
AI Pricing Insights
devToM helps companies build their pricing strategy based on actual market data. It presents data points on product prices across relevant markets and competitor products to help businesses create a winning pricing strategy for their product. With the devToM Average Price feature, they can track live competitors' prices, analyze their strategies and build their pricing strategy based on live market data.
Sign-up to devToM and get your FREE 30-Days trial now!
Pricing depends on product value, trends, marketing, positioning, and branding. However, competitor prices are also one of the most critical factors that can generate a competitive advantage. Companies can identify new opportunities and develop a pricing strategy to make their products sell!
With devToM, companies can receive alerts whenever their competitors change their prices, identify new suppliers to reduce costs and keep their product prices aligned with the current market status.
More advantages are:
- Companies get alerts every time their competitors change product prices
- They save on budget with new supplier opportunities
- They generate a competitive pricing advantage
How can companies use devToM?
Companies can sign up in devToM through the leading site. Here, they can sign up and create a new one. Companies can get a free 30-day trial through sign-up and enjoy many AI advantages.
Alternatively, companies should add their username and password to enter if companies already have an account.
With access to devToM, companies can add a project. It can be just a new idea or an already prepared product.
After adding their products-ideas, they can access various data using AI technology.
Pricing insights assist businesses and products in obtaining helpful information regarding the pricing strategies of other companies and help companies find the perfect price and gain all the advantages above. Find more about pricing insights here.
Determining the final price is a challenging, costly, and time-consuming process. Many businesses need help selecting the final price, even though they can employ strategy.
Although the preceding, AI technology has arrived to put an end to all of the price-related issues. devToM brings AI technology closer to all businesses, and what was once an elusive dream is now becoming a valuable tool for all companies. One-click separates them from the benefits of AI technology.
devToM is an AI-powered Product Development platform that converts and maintains product ideas, A SaaS application that enables product intelligence by combining the power of artificial intelligence, unstructured data, and a system of best practices.
Regarding devToM, professionals can quickly identify risks and opportunities, analyze the market using real-time data, design innovative products based on market trends, collaborate with their teams more effectively, and create successful products. Find more about devToM here.
Healthcare Technology: 5 tech innovations and trends to expect in 2023
In recent years, an increasing number of innovations and trends have been established in the healthcare sector. Healthcare technology could not remain unaffected by today’s...