5 pricing tips for small companies

The sluggish economy has everyone talking price. Dollar stores are thriving – Family Dollar Stores stock price is up 60% over the past year; Dollar General’s stock price is up 27% since November – putting pressure on industry king of cheap, Wal-Mart, whose stock price in comparison eeked out a 3% increase over the past year as it struggles to maintain top-line growth. What can small companies do in this price squeeze? I contacted Rafi Mohammed, a pricing strategy consultant and author of the pricing strategy book, “The 1% Windfall: How Successful Companies Use Price to Profit and Grow,” for his thoughts. He offered the following 5 tips:

Secrets Revealed: Pricing that makes customers buy

Conventional wisdom says that a product priced at GHS99.99 will seem less expensive than a product priced at GHS100. Researchers have also found that a precise price, like GHS99.37, is more believable and appears to offer a greater value than a round price like GHS100. Based on this, you might conclude that round prices – the ones that end in zeros – are always a bad idea. But recent research shows that round prices are perfect for certain types of purchases.

To see why this is true, pretend for a moment that you are at your local store. There’s an area near the front door with items priced at GHS1.00 and GHS3.00. It’s unlikely that any of these things was on your shopping list, yet you may find yourself unable to pass up the Star Wars socks. And then, near the checkout, there’s a rack of GHS5.00 DVDs. You see a favorite movie and happily toss it into the cart. Those round prices were pretty effective.

Advert Analysis: Drop that yam

If you are an ardent reader of the Advert Analysis Column of this magazine, you will notice that I have remained consistent in maintaining that the telecommunications industry is on my A-list when it comes to adverts. From MTN “Aben Wo Ha” to “Make Your Change With Airtel,” I have outlined many elements that have made these adverts outstanding in my opinion. Yet again, I have been proven right with the new Tigo “Drop That Yam” advert. Let’s take a quick run through the commercial.

The advert begins with a “knocking” ceremony of a lady. During the rite, a phone, which happens to belong to the would-be husband, rings? As he picks up to answer, the lady’s mother interrupts,