Pricing is a very
crucial point for every businessperson. The goal in pricing is to provide sufficient margin to cover overhead and generate a profit without pricing yourself out of the market. In pricing products and services, one imporatant point to consider is what the market will bear.
You have to find out if your product or service is unique. Having a unique product or service means there is little in the way of direct and indirect competition and you are a market leader who has more freedom in setting the prices. But it does not mean you can charge very high prices. If you have a unique product and you set your prices high, your customers can still pick an alternative product or not buy at all. Also, your high margins may give incentives to other competitors to copy your product and then undercut your price. An very clear example of this is the
famous Apple Computer. It was a very unique product, the company charged very high prices and it was the market leader. But the entrants like Dell and Compaq offered alternative products at better prices was one of the factors that led to Apple losing market share.
