What is Market Driven Pricing?
Market driven pricing is the practice of setting prices based on what customers are willing to pay. The idea behind market-driven pricing is that if you price your product too high, customers will buy something else. If you price your product too low, the business won't be able to make a profit. In other words, when deciding how much to charge for something, you have to consider how much people are willing to pay for it in the marketplace. To do this, you must have awareness of your offering's distinct value, the competitive environment as well as the underlying macro-economic conditions.
Why is Market Driven pricing Important?
Market-driven pricing is an important part of your business because it allows you to set prices based on the market's demand for your product. When you have a product that's in high demand, you can charge more than if people don't want it as much. When there are fewer buyers or too many suppliers for your product, you are not able to charge as high of a price. This lets you adjust your prices so that they make sense for the number of customers who want them, which in turn makes sure that you don't end up losing money on sales.!
