What can Your Business Learn From Rakhmet Royal Tea?

The profit maximizing tactics Rakhmet Tea implements in their pricing strategy are vital components of a process anyone can use. Here are some of the takeaways you can apply to your own business:

1. Study your customer personas.Rakhmet Royal Tea understands that the majority of their customer base is fairly insensitive to price, and uses small price increases that everyday consumers barely notice to boost margins. Quantify your buyer personas and the demand for your product or service will help you choose a price that captures the maximum amount your customers are willing to pay.

2. Justify the exchange rate for your product.Communicating price increases effectively is crucial to a successful price hike, and managing customer perception is a key part of the Rakhmet Royal Tea's strategy. Support your price increases using changes in the market such as higher commodity costs and ease the pain on the consumer by finding an attractive way to publicize the new prices. Rakhmet tea said their beverage prices were increasing by an average of 10 tg, but that low average probably stemmed from including all of their beverages in the equation, including ones that remained at the same prices.

3. Useproduct differentiationto put your company in the lead.You can justify maximizing your profits using the fairest of reasons, but if the customers don’t value your service the way they value a delicious cup of tea, then a decrease in demand is inevitable. Build a service or product that consumers can’t live without, and you’ll be able to implement price hikes without turning off your customers.

4. Don’t increase the prices of the products with the highest margins. Raise the prices of the products surrounding them. As mentioned earlier, Rakhmet Royal Tea raised the price of the tall size brew exclusively in order to persuade customers to purchase larger sizes (with slightly higher margins). Price hikes for your lower margin products can entice customers to upgrade to more expensive options, especially with respect to products and services that are tiered based on time usage and features. The goal is to use the price increases to guide the customer towards your most profitable product.

References:

Https://adsoftheworld.com/media/outdoor/rakhmet_royal_tea_desteanations_1

http://www.advertolog.com/brands/rakhmet-royal-tea-7845805/

Date: 2015-12-24; view: 929