Pricing Your Product or Service

7. Flexible Pricing

7.1 Should you use different margins for different items, as department stores do?

• You may want higher margins on products with low unit costs or slow turnover, and on products that take up a lot of space.

7.2 Is demand seasonal?

• It costs more to go on holiday in the summer and over Christmas than in March.

7.3 Will some customers pay a premium? This strategy can be extremely profitable.

• For example, a plumber may offer low daytime prices (to ensure a full workload), but charge heavily for emergency call-outs (when customers will pay much more).