The goal of pricing a product or service for any small business owner is to charge the maximum amount that customer is willing to pay and maximize profit. If you charge lower than what customer is willing to pay you leave money on the table. If you charge higher customer will walk out the door and you will lose profit.
To some it may seem like Black Magic, but pricing is combination of art and science. Big corporations, such as Wal-Mart, do lot of research and number crunching to figure out to the pennies exactly how much they should charge so that they get the maximum profit. This is the science side of pricing. No matter how much number crunching and data analysis you do human behavior and psychology plays a big role in customers determining whether a given price is a good deal or not. This is where art comes into play. There are number of ways in which business owners can convey the message about good deal (aka pricing) and take advantage of how customers react to that message.
I came across an excellent Infographic the other day, courtesy of Blog Growth that puts this behavioral science research into practice to come up with ideas that will make customer nudge your way. Let me know what you think about this and if you have any other “tricks” to getting the best price for your product.
Read more - http://www.smallbizviewpoints.com/20...aximum-profit/