When small business owners think about marketing, their ideas are often limited to promotion and advertising only.  But marketing involves other activities, such as distribution, your product or service, and price. What kinds of things make up the pricing facet of the marketing mix for a small business?

• Volume discounts and wholesale pricing
• Suggested retail price
• Early payment and cash discounts
• Seasonal and holiday pricing promotion
• Bundling

Some small businesses have only one pricing strategy: set your price lower than everyone else.  But is this always the best approach?

Before making any pricing strategy decisions, conduct a competitive analysis of other large and small businesses in your space.  Who’s the low-cost leader?  Who is the expensive-but-worth-it company? How does your brand fit within the competitive matrix?

Once you understand the playing field, you can adjust your tactics accordingly. A price war is never good for for any industry, so you’ll want to consider ways of adding value the product or service offering of your small business.  What are the standard services for each price point, and how can you add low-cost but high-value items to each package?

Another way to strengthen the pricing strategy of your small business marketing plan is to become the exclusive vendor of a specialty product or service. If you’re the only business in your market offering underwater plumbing services, you’ll never have worry about competing on price.