If you have ever accepted bids for a project such as construction, moving, or painting, other buyers might have apprised you that accepting the average bid, the one that falls in the middle, might be the best option. If you have ever purchased a large ticket item, you understand why consumers might question the quality and effectiveness of an item that is sold below cost.

The same applies to business pricing strategy. Pricing according to industry standards and the business owner’s own comfort level will help improve business productivity and success.

Being overzealous about increasing the customer base and pricing products or services below going rate might put your business in the danger zone. Your customers might not take your product or service as seriously as they ought.

Another issue stands applicable as well: When you find you have good reason to increase your costs, to add a service or upgrade a product, for example, your customers are likely to balk because they are accustomed to your too-low pricing.

The following product marketing strategies should be considered before planning a pricing range in your business plan:

Value added is an important pricing strategy consideration. Ensure your product or service is unique in as many ways possible. As yourself these questions: Why would I purchase this particular good? What is its value? If you sell the same product as a competitor, then perhaps you can increase the warranty time or technical assistance offered, as an example. Try to provide a product or service that stands apart, something that your competition does not offer already. If they do offer it, try to put a different spin on your idea. If yours is the only one available, customers will have no choice but to accept your price range.

Similarly, branding is an essential consideration. Be sure your business can effectively create a product or service that has an identifiable name and uniqueness associated with your specific company, known as brand. Many well-known products that are household names rose to that very level due to branding. Create a brand for your company. This is where marketing is essential. Create a name and saturate the market with it.

Perform a competitive analysis and be exclusive. If you have not already, conduct a market study of pricing for similar products or services within your customer reach. Consider the competition’s entire offering, not just one part of it. Look at the ceiling price, that is, the highest price paid for the same or similar product/service. Be sure you are comparing apples to apples.

Price elasticity is a factor as well in pricing strategy formation. This is how flexible you can be in terms of pricing according to demand for your good and how consistently you expect your particular product or service to sell. If there is a higher demand for your good, a higher price ceiling might exist. Low elastic demand depends on fewer or no competitors. Demand varies from business to business and more so, from industry to industry. Understand the applicability for your particular industry.

If your business holds products or services that are too expensive to maintain, drop them. If, for example, in your accounting business you offer tax preparation for individuals from January to April every year, but that means having to hire an additional expensive accountant, then cease conducting this part of your business unless you can create a profit within a time frame that fits your strategic plan.

Proactively avoiding any type of price war will save time and effort, and your business. Following all the pricing standards and recommendations make for good pricing strategy.