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"Cross-Border Marketing Overview (15): Pricing Practices"
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"Overview of Cross-Border Marketing(15): Pricing Practices"
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一、定价过程Pricing process
1、3段9步定价过程3-stage, 9-step pricing process
2、快速定价过程Quick pricing process
Sometimes, the life cycle of cross-border e-commerce products is very short, and the rigorous classic pricing process has high capital and time costs, which cannot meet the rapid pricing needs of most cross-border e-commerce products. Therefore, the industry commonly uses benchmarking to complete the rapid pricing of products, which can generally be subdivided into three types: arithmetic mean benchmarking, psychological median benchmarking and competitive product benchmarking.
Sometimes, the lifespan of cross-border e-commerce products is very short. The traditional pricing process is rigorous but expensive and time-consuming, making it unsuitable for the fast pricing needs of most cross-border e-commerce products. Therefore, the industry often uses benchmarking methods for quick product pricing, which can generally be divided into three types: average benchmarking, psychological median benchmarking, and competitor benchmarking.
(1) Arithmetic mean benchmarking, that is, searching for all suppliers of the same product, calculating the arithmetic mean value of reasonable pricing data, and pricing sales according to the mean.
Finding the average price by looking at all the suppliers of the same product, calculating the average from reasonable price data, and then pricing the sale based on that average.
(2) Psychological median benchmarking, that is, using the previously mentioned formula Pricing = Low Price + (High Price - Low Price) ×0.618 to determine product pricing.
The psychological midpoint benchmarking uses the formula mentioned earlier: Price = Low Price + (High Price - Low Price) × 0.618 to set product pricing.
(3) Benchmarking of competing products, that is, closely tracking the price of a competing product, and adjusting the pricing at any time according to the price of competing products.
Competitive benchmarking means closely tracking a competitor's prices and adjusting your own pricing accordingly.
二、建立产品价格体系Establishing a product pricing system.
考虑产品定位的组合定价Consider the combination pricing of product positioning.
For example, in the operation of cross-border e-commerce stores, product pricing must be divided into drainage payment, flat sales payment and profit payment. A distinction should be made between the roles of products in different price tiers.
For example, in operating a cross-border e-commerce store, you need to categorize product pricing into three types: traffic-generating products, regular-selling products, and profit products. It's important to distinguish the roles of products at different price levels.
(1) Drainage: Combined with the cost of the product, the product price should be lower than the market price, and this product will bring customer traffic to the store. The price of the store's drainage money is lower than the middle of the median psychological price of the target customer, and the calculation formula is as follows. Pricing = low price + (high price - low price) × floating coefficient But according to the degree of differentiation of the product, the floating coefficient is generally between -0.4 and 0.4, and the specific value of the floating coefficient needs to be determined according to the actual situation. It should be noted that in practical application, the pricing fluctuation of drainage money is generally reflected in the form of discounts. In addition, with the significant increase in sales of drainage products, if merchants take advantage of large-scale production, the cost price of goods will be greatly reduced, and merchants will gain more and more freedom in pricing. Merchants are likely to gain absolute price advantage and break through the original pricing rules, so as to consolidate the product ranking and related competitiveness of the drainage model at a lower price than the competition.
(1) Traffic-generating products: Based on the product cost, the price should be lower than the market price. These products are meant to drive traffic to the store. The pricing for these products is set slightly below the median price perceived by the target customers, using the following formula: Pricing = Low price + (High price - Low price) × Fluctuation coefficient. The fluctuation coefficient usually ranges from -0.4 to 0.4, and should be determined based on actual circumstances. Note that in practice, the pricing fluctuations for traffic-generating products often manifest as discounts. Furthermore, as sales of these products significantly increase, if the seller leverages the advantages of mass production, the cost can decrease substantially, giving them more freedom in pricing. They may gain a competitive price edge, breaking the original pricing rules and solidifying the ranking and competitiveness of these products by pricing them lower than their competitors.
(2) Flat sales: that is, daily sales of products. The price of the product should be kept at the same level as the market price to ensure the daily sales of the store. Pricing = low price + (high price - low price) × 0.618
(2) Regular-selling products: These are the everyday products. Their prices should match the market price to ensure the store’s daily sales. Pricing for these can directly use the median psychological reference, calculated as: Pricing = Low price + (High price - Low price) × 0.618.
(3) Profit: The product price should be higher than the market price to protect the gross profit of the store, and the calculation formula is as follows. Pricing = low price + (high price - low price) × floating coefficient In the formula, the floating coefficient is generally between 0.75 and 1. Generally speaking, the pricing of profit is generally 10%~60% higher than that of drainage.
(3) Profit products: The price should be higher than the market price to secure the store's gross profit. The formula is: Pricing = Low price + (High price - Low price) × Fluctuation coefficient, where the fluctuation coefficient typically ranges from 0.75 to 1. Generally, the pricing for profit products is about 10% to 60% higher than that of traffic-generating products.
(4) Image model: Image product is to enhance the image of the store and increase the value of consumers, and the calculation formula is as follows. Pricing = low price + (high price - low price) × floating coefficient In the formula, the floating coefficient is generally between 1 and 2. There are not too many such products in one store, generally 1~2 models.
(4) Image products: These are meant to enhance the store’s image and increase perceived value for consumers. The formula is: Pricing = Low price + (High price - Low price) × Fluctuation coefficient, with the fluctuation coefficient usually between 1 and 2. There won’t be too many of these products in a store, usually about 1 to 2 items.
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Copywriting|Luo Shan
Typesetting|Luo Shan
Audit|zy
Reference: Cross-border e-commerce marketing planning
Translation source: ChatGPT
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