4 Startup Plans to Win Pricing Battle

The writer is founder & CEO of Grazitti Interactive and a founding member of Chandigarh Angels Network


The fate of any startup is in the hands of its customers ultimately, because they give the company its sales and revenue. Therefore, the first plan of a startup should be to gather all possible information about its potential clientele. As an entrepreneur, before developing a pricing strategy, you need to understand two things—how many people are willing to buy your product and what is the maximum price they will pay for it. Then check if your target audience is sensitive to changes in price and if these potential customers are also quick to shift to substitutes.

Additionally, studying consumer psychology will help you strategize better. For appropriate pricing, gain knowledge of their favourite brands, status symbols, and discount preference. Gather information about the money they spend on basic goods, comforts, and luxuries.


One of the most crucial aspects of pricing is being aware of all the costs you incur. It is common for startups to make the error of disregarding some costs in a bid to lower the product’s price point. To avoid this mistake, you should keep a record of your expenses, which might include labour cost, capital expenditure, debt, operational cost, and marketing cost.

Usually, startups look to capture the market by introducing their products at competitive prices. By tabulating all costs, it is easier to identify the areas where these expenditures can be reduced or optimized to enable you to sell at a lower price without compromising on the profit margin.


Most startups are in the game to maximize profits, while others may want to focus on generating more sales, increasing their market share, or maximizing revenue. The way you price your product will depend on your business goal. For example, if your goal is to make profits, you will be open to having a higher price point for your product. On the other hand, if you want to maximize sales or your market share, you will prefer making the product cheaper and more affordable for the masses.

Also, business aspirations may vary over time. Sometimes startups use predatory pricing just to build their brand name and move to a higher price once there is sufficient demand.


When you enter a market, there are bound to be other players who sell something similar. Your product may be unique in some ways but it is still essential to analyze the competitive landscape. Gather information about your direct and indirect competitors, their market share, and the price for which they are selling their product.

If you feel you have strong competition, your strategy may be to keep the prices low so that customers are attracted to try your product. But, if you feel that you have created something that is evidently superior to all others in the market, you can consider a higher price.

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