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  • Writer's pictureHigor Barbosa

How to Manage Pricing in a Marketplace?



If you own a marketplace, you understand that one of the main challenges is competing with other sellers offering similar or complementary products. How do you stand out amidst the abundance of offerings and capture the attention of customers? How do you set the ideal price for your product without losing sales or profit margins? How do you provide benefits that add value to your product and foster customer loyalty?


In this article, we will address these questions and provide guidance on managing pricing in a marketplace.


Market Analysis

The crucial first step in managing pricing in a marketplace is to carefully analyze the market in which you operate. This involves understanding your target audience, identifying competitors, analyzing trends, and recognizing specific demands and opportunities within your segment.


Tools such as Google Trends, Google Analytics, and SimilarWeb are invaluable instruments for obtaining data on the behavior, preferences, needs, and challenges of potential customers. These insights are crucial for understanding what consumers are seeking, valuing, willing to pay for, and expecting from a marketplace.


Furthermore, these tools allow you to monitor competitors, identifying their strengths and weaknesses, differentiators, strategies, prices, and promotions. This meticulous analysis enables you to compare your product, evaluate your market positioning, and identify opportunities to stand out.


Positioning Definition

The second crucial step is to establish the positioning of your marketplace. This involves determining how you want to be perceived by customers, your purpose, value proposition, competitive differentiator, and niche.


The positioning should align with the target audience, product, market, and company objectives. Clarity about what is offered, to whom it is offered, why it is offered, and how it is offered is essential. This message should be communicated clearly, consistently, and coherently across all customer interaction channels.


Price, as a significant element influencing perceived value, should reflect the desired positioning. If the goal is to be perceived as a marketplace of quality, exclusivity, innovation, or sustainability, the price should be consistent with that image. If the proposal is to be a marketplace of accessibility, practicality, or economy, the price should be suitable for that proposition.


Product Differentiation

The third crucial step is to differentiate the product offered in the marketplace. This involves offering something that competitors do not or making improvements in aspects such as quality, design, functionality, durability, and warranty, among others. Differentiation can be achieved in various ways:


  • Improving quality, design, functionality, durability, and warranty.

  • Adding features, benefits, services, gifts, or bonuses.

  • Personalizing the product according to customer preferences, needs, and desires.

  • Creating a unique, enjoyable, fun, or exciting shopping experience.

  • Establishing a relationship of trust, proximity, transparency, or loyalty.

By differentiating the product, you can elevate the perceived value by the customer, justifying a higher or, at least, more competitive price. Additionally, differentiation contributes to strengthening competitive advantage, reputation, authority, and visibility in the market.


Price Adjustment

The fourth step is the strategic adjustment of the price. This involves setting a price that aligns with the objectives, positioning, product, target audience, and the specific marketplace. Various methods can be used to calculate the price:


  1. Cost: Based on production, acquisition, distribution, and promotion costs, plus a desired profit margin.

  2. Competition: Based on prices practiced by direct and indirect competitors, which can be equal, higher, or lower depending on the adopted strategy.

  3. Value: Based on the value perceived by the customer regarding the product, considering the benefits, solutions, and emotions it provides.

  4. Demand: Based on market demand for the product, considering factors such as seasonality, scarcity, urgency, among others.

Adopting a strategic approach to price adjustment not only allows for a swift response to changes in the market scenario but also provides substantial benefits, such as maximizing profits, enhancing competitiveness, and ensuring strategic flexibility. This practice enables the implementation of different pricing strategies, promoting experimentation and continuous adaptation, which can result in greater attractiveness to consumers and optimization of financial results.


Benefits Offering

The fifth and final step involves offering benefits to add value to the product and the customer. This includes providing advantages, facilities, incentives, discounts, among other things, to increase attractiveness, conversion, and loyalty.


Benefits can be offered in various forms, such as:


  • Free, fast, or personalized shipping.

  • Installment options, payment by invoice, or cashback.

  • Extended warranty, easy exchange, or free returns.

  • Coupons, vouchers, or gifts.

  • Loyalty programs, referrals, or rewards.

  • Support, consultancy, or training.

By offering benefits, it is possible to increase customer satisfaction, trust, loyalty, and recommendations. Moreover, benefits contribute to increasing the average transaction value, recurring revenue, lifetime value, and return on investment.


Conclusion

Managing pricing in a marketplace is undeniably a challenge but also represents a significant opportunity. With the guidance shared in this article, it is possible to set the ideal price for the product, aligned with the market, target audience, positioning, product, and company objectives. By adopting a strategic and well-founded approach, it is possible to maximize the potential of the marketplace and achieve satisfactory short and long-term results.


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