Know Your Market: Price It Right

Know Your Market: Price It Right

Commerce NCEA Level 1 Customer & Competitor Analysis for Pricing Decisions Achievement Standard 1.2

Learning Objectives

Understand the importance of customer analysis in pricing Analyze competitor pricing strategies Identify non-financial factors affecting price decisions Apply market research to pricing scenarios

Think About This...

Why might two identical products have different prices in different stores? What factors beyond production costs influence pricing decisions?

What is Market Analysis?

Systematic study of market conditions Understanding customer needs and behaviors Analyzing competitor strategies Gathering non-financial information for business decisions

Customer vs Competitor Analysis

{"left":"Understanding WHO buys your product\nIdentifying customer demographics and preferences\nAnalyzing buying patterns and price sensitivity","right":"Researching what competitors charge\nStudying competitor product features\nAnalyzing competitor market positioning"}

Customer Profile Activity

Create a customer profile for a local café Consider: age groups, income levels, lifestyle preferences Discuss: How would this influence menu pricing?

Key Customer Factors for Pricing

Demographics (age, income, location) Price sensitivity and willingness to pay Shopping habits and preferences Brand loyalty and perceived value

Competitor Analysis Framework

Pricing Scenario Challenge

Scenario: You're launching a new energy drink in NZ Research task: Find 3 competitors and their prices Analyze: Target customers and their price expectations Decide: Your pricing strategy and justify it

Key Takeaway

"Successful pricing isn't just about covering costs - it's about understanding your market and positioning your product where customers see value."