Workshop on business development, growth held at Kramer Hall
Wednesday, June 26, 2019 • The Hammonton Gazette • Page 3
NJSBDC, from Page 1
and partner of the New Jersey
economic Development Authority
(NJeDA)—to its satellite office at
Stockton University Kramer Hall
for a workshop that explored the
pricing models and strategies that
small businesses can implement to
maximize profitability.
the workshop was led by
UCeDC training and technical
Assistance Officer Joseph Lam-
berti, who said the event is just
one of the numerous complimen-
tary services the UCeDC provides
to area entrepreneurs and small
business owners.
“We really exist for small busi-
ness. So, we help for lending and
with small business counseling
and workshops like this—almost
all of which is free,” Lamberti
said.
the small business representa-
tives that attend the UCeDC’s
workshops also often receive con-
nections to local small business
counseling services provided by
the NJSBDC. those seeking one-
on-one counseling in the Ham-
monton area will soon be able to
do so every friday at Kramer Hall
throughout the summer with NJS-
BDC of Atlantic, Cape May and
Cumberland Counties Director
Carol Waties (for more informa-
tion, call (609) 626-3889).
the essence of Lamberti’s ana-
lytical presentation about small
business marketing and financial
literacy was centered on three key
pricing models: cost-plus, market-
based (competitive) and premium
(perceived value). Lamberti said
there are several factors that small
business owners must consider be-
fore they determine how much to
charge for the goods or services
they provide.
“We want to understand how
the cost structure affects the price
structure. it’s not just sticking a
price tag on your product or serv-
ice and try to start selling; it’s
based on your own cost structure,”
Lamberti said.
Lamberti also stressed the es-
sentiality of a business under-
standing what its target market is,
and understanding the factors that
influence the buying decisions of
that market.
“there’s a combination of
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things that help your buying deci-
sion. You need to recognize what
that is among your target audience
and then not only price your prod-
uct appropriately, but market it ap-
propriately to that particular
target,” Lamberti said.
the first—and most common—
pricing model that Lamberti high-
lighted was the cost-plus model,
which is determines customer
pricing by totaling the total cost of
materials needed to produce a
product, the total cost of the labor
required during that process and
the desired profit for selling the
product.
Although the cost-based pricing
model is simple equation that’s
easy to calculate, Lamberti said it
does not guarantee whether a busi-
ness’ target customers are going to
purchase their goods or services
on a regular basis. to avoid this
discrepancy, many businesses will
opt to use the market-based pric-
ing model, which is predicated on
the competitiveness and price pat-
terns within a given local business
market.
“You’re trying to meet what is
the going rate out there, what is
the typical price for your product
or services right now, and you
want to be right around there,”
Lamberti said.
Although the market-based
pricing model is slightly more in-
tuitive than cost-based, Lamberti
said businesses can still experi-
ence pitfalls with this model be-
cause it does not always ensure an
ideal profit margin.
“With market-based, you’re as-
suring yourself that you’ll have a
competitive-level pricing, but
you’re not necessarily ensuring
yourself of the profit margin that
you need for the financial goals of
your business. it all goes down to
cost structure … You ever see a
gerbil on a wheel? they look re-
ally busy, don’t they? they’re
working really hard, aren’t they?
Are they getting anywhere? …
Don’t be a gerbil,” Lamberti said.
if a business is able to success-
fully sell enough of its product and
market itself to the point where it
has built brand power and name
recognition, Lamberti said they
may implement the less-common
premium pricing value, which
hinges on the perceived value of
the product or service a business
provides to its customers.
“Premium pricing is not
very common, but it can work for
your business if you’re intention-
ally setting a price that is higher
than average out there ... this will
definitely assure you of covering
the profit margin and covering
your costs, but the perception has
to be that the consumer is getting
something of a significantly
higher value, or maybe just has it
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