THE Jamaica Business Development Corporation (JBDC) is helping micro, small and medium-sized enterprises (MSMEs) to identify the perceived value of their products and services. This will in turn help entrepreneurs to price their offerings in a way that is profitable for their business. Managing director of Sisters' Ink Opal Levy encouraged entrepreneurs to shift their focus from just pricing to understanding the value of their business as well as how this value is perceived by their target audiences.
She was speaking at the Virtual Biz Zone webinar held July 12 under the theme 'Pricing Strategies for MSMEs'. Levy noted that there are various types of pricing models but said, "It is important that entrepreneurs consider value-based pricing, which involves pricing your product based on the value it creates for your customer."
"Ask yourself some questions, does your company generate value? If not, focus on the value creation aspect first, think about the value your product or service delivers to your customer," she said.
She helped participants to discern the value their offerings can give by asking, "Does your company save money, increase customer satisfaction, reduce risk, save time, create new insights, accelerate a process, improve performance or increase quality?"
"You also have to have a target audience that you are going after and entrepreneurs must interact with these people, so you can know exactly what they want and importantly what problem are you solving for them and finally how much they are willing to pay for the solution, because that is the essence of pricing."
Levy provided participants with a relevant example: "Look at Amazon, they are not selling any unique product but what they are selling is a logistics and distribution network that is efficient. Entrepreneurs must look at the products they are selling, and note that the value does not have to be the product itself but it has to be in how the product is offered."
She noted from her presentation that the challenge for any business is to discover a deep need within a sizeable market where customers are willing to pay for a solution.
To frame the discussion, Levy walked participants through the importance of pricing and what it ultimately determines for an entrepreneur's business.
"Pricing determines your market position, sales and distribution channels you can use, your company's growth and adoption rate, your company's financial soundness and the service level expected by your customers," she added.
Levy encouraged participants to ask themselves these questions, "How many more customers could I have? And how much money am I losing?" Continuing she said, "The issue of pricing presents two challenges to us, if it is too high, not enough people are going to buy and if it is too low, money is being left on the table."
The Virtual Biz Zone ends the two-part series on business strategy offered by the JBDC for MSMEs to learn key to tools in positioning their businesses for success. Levy concluded by imploring participants to "Work hard, do a lot of reading, talk to your customers and you will be on the right path."
The JBDC Virtual Biz Zone webinars are geared toward stimulating entrepreneurs within the MSME sector.
- We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper; email addresses will not be published.
- Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.
- We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.
- Please do not write in block capitals since this makes your comment hard to read.
- Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: firstname.lastname@example.org.
- If readers wish to report offensive comments, suggest a correction or share a story then please email: email@example.com.