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Hidalgo County Herald
Lordsburg, New Mexico
February 13, 2015     Hidalgo County Herald
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February 13, 2015
 
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HIDALGO COUNTY HERALD FRIDAY, FEBRUARY 13, 2015 3 SBDC What you cannot afford to forget when pricing your products By SBDC Staff When it comes to finding the right price for your product or service, there is no formula and no single correct answer. Even within the same industry, what works for one company won't necessarily work for the next. Today, a Google search for the term "pricing products" returns 297,000,000 results, almost double the results of a search for the phrase, "writing a business plan"--a business process that does have a formula, and which can be learned. Pricing products correctly is by comparison, an art. It requires an awareness of the market as it currently exits, the vision and ability to see a market as it could or will exist, and the logic to de- cide on a figure that will cover costs, send a message and maxi- mize sales. Your starting price defines you In 1986, Pixar Animation Studios was a very different com- pany than the one we know to- day. It was a hardware company whose main focus was on selling the Pixar Image Computer. In these early days, the partners of the company--Steve Jobs, Alvy Ray Smith, John Lasseter and Ed Catmull--struggled with figur- ing out how to run the type of business they had just started. For Ed, an early concern was figur-" ing out how much to charge for their machine: "I was told by the presidents of Sun and Silicon Graphics to Senior Citizen Lunch Menu Monday, February 16 Center Closed for President's Day Tuesday, February 17 Green Chile Chicken Tamale With Cheese Sauce Pinto Beans Garden Salad/Dressing Mandarin Oranges Wednesday, February 18 Roast Beef Mashed Potatoes/Gravy Vegetable Sald California Mix Vegetables WW Roll/Margarine Apricots/Topping Thursday, February 19 Chicken Adovada Pinto Beans Spinach Flour Tortilla Rice Pudding Friday, February 20 Cheeseburger Lettuce/Tomato/Onion Macaroni Salad Peas & Carrots start with a high number If you start high, they said, you can al- ways reduce the price; if you lowball it and then need to raise the price later, you will only up- set your customers. So based on the profit margins we wanted, we decided on a price of $122,000 per unit. Big mistake. The Pixar Image Computer quickly gained a reputation for being powerful but too expensive. When we low- ered the price later, we discov- ered that our reputation for be- ing overpriced was all anyone remembered. Regardless of our attempts to correct it, the first impression stuck." - Ed Catmull, Creativity, Inc. Ed Catmull acknowledges that for a complex question like pricing, there is no simple answer. Rather, focus on the bigger ques- tions: How will you meet your customers' expectations? How will you invest in further devel- opment of the product? Finding answers to questions that keep the 'bigger picture' in mind, should help you figure out the most ap- propriate price for your product. Your price positions you in the market While Ed argues against "start high" pricing advice, Tim Berry, the Founder of Pale Alto Software, believes that pricing too low is the real risk: "There is no algorithm for pricing. It's mostly instinct. Cov- ering costs acts as a floor, not a useful indicator Pricing is your strongest marketing message and most startups should price high, position themselves as premium value with premium price. Oh, and one of the common fallacies around is that startups are sup- posed to price below the compe- tition. Wrong. Higher is better, by far; and then back that up with value." - Tim Berry, Founder of Pale Alto Software Tim and Ed may disagree on low versus high pricing but both recognize that there is more to the question than a "tried and tested process." According to Tim, you set your pricing based on your situation, the strategy you are pursuing, costs to produce, your competition, the weather, your instinct--basically, whatever is most important to you at the time. And while there is no formula for the right price, there are several mistakes you can avoid making when you get to this stage of plan- ning: Mistake 1: Thinking it's best to be the lowest price provider This approach may work for businesses that sell undifferenti- ated commodities but strategies that center on being the "lowest price" usually require a lot of ini- tial investment and a very large software costs, installation of tele- phones, new carpets, and what- ever other miscellaneous ex- penses may come up. If you do not take these costs into account when setting prices, you may run out of money Your price affects your business operations Beyond the risk of sending the wrong message, pricing your product too low could result in having to compromise your mor- als and your mission as you fight to remain the company with the lowest prices Seth Godin refers to this downward spiral as "the tyranny of the lowest price" and provides a perfect example to help you put this notion into per- spective: "To cut the price a dollar on that ebook or ten dollars on that plane ticket (discounts that few, in the absence of comparison, would notice very much) you have to slash the way things are edited, er people are trained or safety is ensured. You have to scrimp on the culture, on how people are treated. You have to be willing to be less caring or more draconian than the other guy." - Seth Godin, Author & Entrepreneur The solution? Get known for something other than your price. What is it that your product stands for or that you would like it to imply about your company? If you have multiple products, your own prices can affect sales If you're pricing more than one product, beware! In 2012, the Yale School of Management pub- lished a study, which revealed that if two similar products were the same price, the cbnsumer would be much less likely to buy either of the products than if there were minor differences in price. In fact, the study found that when participants were given the op- tion to buy two different brands of gum at the same price, only 46 percent made a purchase. By con- trast, when the two packs of gum were priced only a couple of cents apart, 77 percent of the partici- pants bought a pack! This doesn't mean you have to. price every product differently, just that you may want to keep this in mind when your products are incredibly similar. Done right, you stand to do more than save sales; you could very well in- crease them. Consider the bigger picture Hopefully this list will get you thinking about more than just recouping product costs. As we've seen, pricing is essential to branding and to the future of your company so take the time get it right but also to consider the big- ger picture. Putting a number on your product doesn't answer the Iola Barka Diaz Iola Barka Diaz Iola Barka Diaz, 90, a resi- dent of Silver City, New Mexico, passed away Wednesday, January 28, 2015. Iola was residing at her daughter's home in Peoria, AZ. A memorial service was held on Tuesday, February 3, 2015 at Baca's Funeral Chapels in Silver City. Inurnment and concluding services were held on Wednesday, February 4, 2015 in Lordsburg, NM at Shakespeare Cemetery. Iola was born June 18, 1924 in Gila, New Mexico to John Luce Barka and Pauline Polanco. Iola was raised in Gila, New Mexico. She, along with the family, spent their time traveling between Gila and the Black Range where her father was working in construc- tion for O. D. Coward Construc- tion building what is now the highway between Hillsborro and Silver City. Iola's love during her early teens was basketball, and she broke scoring records with 67 points in one game. In her late teens, she was recruited by the Goodyear Corp. during the WWII and trained to be a riveter. Iola worked at the Goodyear Plant in Arizona making Sea Planes, as she was a "Rosie the Riveter" during the war effort. As an adult, Iola married Pablo Diaz. She managed her own restaurants in Los Lunas, New Mexico. She and her husband, Pablo, owned a small farm where they raised their children. Iola and Pablo moved back to Lordsburg in 1972. She moved to Silver City in 1979 after Pablo passed away. Iola spent her time between Sil- ver City and Peoria, AZ as she re- quired specialized medical atten- tion. Iola is survived by her three children, Frank and his wife Yolanda Diaz of Espanola, N.M., Doris and her husband James Alarcon of Peoria, AZ, and Eddie Joe and his wife Margaret Diaz of Silver City, NM. Also surviving Iola are her grandchildren, Armando D. Estrada, Jonathan E Estrada, Monica Lopez, Natalie Diaz, Briitany Diaz, Danielle Diaz, Isaac Diaz, and Nicholas Diaz; her great-grandchildren, Jonathan James Estrada, Anthony www.smithfordlordsburg, com Peaches scale implementation, questions that will steer your busi- James Estrada, Pablo Lopez, DQ murderer Mistake 2: Forgetting that your ness--how will you provide Nathan Lopez, Jacob Lopez, price is also your "marketing value? How will you develop into Adam Lopez, Victoria Diaz- message" the future? How will you adapt Chavez, Brian Daniels, Gabriella parole hearing next month Walter Scott Finnell, the man who shot and killed Richard Bejarano in a robbery at the Dairy Queen in the 1980s is coming up 'for parole on March 2, 2015. He also shot and injured local resi- dent, Karen (Bejarano) McDonald during that incident. She still suf- fers from the ramifications of that injury. McDonald is asking local citizens to sign a petition to keep Finnell behind bars. She will take these petitions to the hearing next month, where she will also testify. Petitions are available at Saucedo's Super Market and Bookkeeping Plus. How do you want to be per- ceived by the outside world? Price too low and chances are the opinion of your product will be low or you will attract an audi- ence that isn't the one you wanted in the first place. Don't forget that your pricing sends a message. It says "I believe I'm worth this much" or "this is the amount of value you're going to get out of this product/service." In short, it's your positioning. Be sure to carefully consider what that is before you settle on a price. Mistake 3: Underestimating your real-life costs Pricing your products based on your gross margin analysis alone is a bad idea. You also need to consider you overheads --your rent, payroll, marketing costs, util- ity bills, insurance, hardware and Hidalgo County ,00I-ii00RALD # New Mexico Press Association Member Hidalgo County Herald (USPS lip 020697) is published weekly by Hidalgo County Herald in the City of Lordsburg, County of Hidalgo, 212 E. Motel Drive, Suite B, Lordsburg, New Mexico 88045-1948 52 issues a year. Subscription rates vary. Subscription rate is $40 per year by USPS mail, $25 per year by email. Requests for correc- tions and complaints concerning news and editorial content of the Hidalgo County Herald should be directed-to the editor. For further information on the Hidalgo County Herald's approved grievance policies, readers may contact the publisher. Any unsolicited manu- scripts become the property of the Hidalgo County Herald and will not be returned. All information contained herein is copyrighted 2015 by the Hidalgo County Herald. All photos/stories, unless stated, are written by our staff POSTMASTER: Send address changes to Hidalgo County Herald, 212 E. Motel Drive, Suite B, Lordsburg, NM 88045- 1948. Periodicals Postage Paid at Lordsburg, New Mexico. PUBLIsHER/EDITOR: Brenda Hood ADVERTISING MANAGER: Glenda Greene PHONE: 575-542-8705 FAX: 575-542-8838 E-MAIL hcherald@aznex.net to competition? An archive of SBDC Busi- ness Reports can be found at http://www.grantcounty beat.com/index.php/archived- items Small Business Develop- ment Center Prospective entre- preneurs and business owners can get free one-on-one help writing business plans from Western New Mexico University's SBDC in Watts Hall at 500 18th Street. As- sistance is available to entrepre- neurs who are starting a business or wanting to expand an existing business. These services are avail- able at no cost. Call 538-6320 for an appointment with a business advisor, or email sbdc@wnmu.edu. More informa- tion may be found at www.nm sbdc.c om/silvercity/ index.html Daniels, Natalia Daniels, and Serena Daniels; her sister Alice Barka of Lordsburg, NM; and brothers Eddie and James Barka of Gila, NM. She was preceded in death by her husband, Pablo A. Diaz; son Roger Diaz; her Thomas Frank, William and John Barka, Inez Hood, Irene Hood, and Mary Elizabeth Barka. Sincere thanks to famtly and friends who offered calls, cards, flowers, food and, most importantly, prayers, during our recent time of need. Special thanks to the St. Joseph's Church Choir, Ft. Weber and the St. Joseph ladies who helpedwith the reception. YOur kindness and love were of great comfort toour family during this ifficult time. Check our our great selection of Tires at competitive prices! Frances Mae (Fritz) Krulic Frances Krulic Frances Mae (Fritz) Krulic quietly left us in her sleep on Feb- ruary 1, 2015. She was born Sep- tember 21, 1931 to the late Henry and Grace (Wolfrom) Fritz. Frances was united in marriage to Jack Gauthier on June 18, 1950, until his death on January 30, 1987. From this union, she be- came the beloved mother of daughters: Sherrie Eimet and hus- band, Dave; Melanie Field and husband, Gary; Denise Olson and husband, Jeff. Frances was united in mar- riage to Charles R. Krulic from June 25, 1988, until her death. She was a member of the Oaklawn United Methodist Church of Hot Springs. She is survived by her spouse, Charles, as well as sisters, Luella, Dorothy, Elaine and brother, Billy. She is also survived by grandchildren Heather Field, Chad Field, Kristen Olson, Erik Olson, Meghan McCallie and husband, Austin; great-grand- children Ethan Spencer and Day- ton Field; as well as a host of be- loved friends and extended fam- ily which include the wonderful staff at the Abundant Life Care Home. The daughters are preparing a Celebration of Life ceremony for all who wish to attend 2:00 p.m. Saturday April 4, 2015, at Caruth-Hale Funeral Home Chapel in Hot Springs, AR. The family requests dona- tions to the Alzheimer's Associa- tion, or a charity of your choice, in lieu of flowers. Guests may register "at www.caruth-hale.com. John D. Neal John D. Neal John David Neal, loving and devoted husband, father, grapd- father and friend, passed away February 4, 2015 in Dallas, Texas. Memorial services were held Sat- urday, February 7, 2015 at Abbey Chapel. He was born July 13, 1934 in Ozark, Arkansas, to Oliver O. Neat and Nevada L. Dunford Neal. He graduated from Longview High School in 1952. He married Phoebe Louise Byers on October 1, 1953. He was an Army veteran. He served in the U.S. Border Patrol from 1958-1984 and was station in E1 Paso, Texas, Lordsburg, New Mexico, Sierra Blanca, Texas and Marfa, Texas. Survivors: Children Larry Neal and Diane; Danny Neal and Marlys; Nancy Griffith; Deanna Neal; and Kevin Neal and Michael Chapman. John attended the First United Methodist Church-Dallas and was a member of the Aldersgate Class, where he had many friends. He also was a mem- ber of the American Legion, BPO Elks, Knights of Pythias, AARP and Fraternal Order of Retired Border Patrol Officers. Memorials may be made to the Crossroads Community Ser- vices at FUMC-Dallas or Na- tional Border Patrol Museum, E1 Paso, Texas. Condolences may be offered at www.RestlandFuneralHome .com Baptist Church l of Lordsburg I 3rd &Animas Streets I L0rdsburg, NM 88o451 LOOKING'FOR'ADEAL?I Stop by and take a took, or give us a call (Manny, Nelson or Eric) 2015 Ford F-350 Take $6,000 off the Sticker] 2014 Ford Edge You save $5k off Sticker Price,or 0% for 60 Months 2014 Ford Fiesta oaded. Take $1,500 off Sticker " Price or 0% for 72 Months Need Service? We offer great deals on tires, and Discounts on oil changes pricing on he, and and brake repairs. 41 well I00AT 400pr WI LLIW lira Jill any written deal to keep your business in Hidalgo County! SMITH 542.3551 FORD ,,,, ,0,., ,,v.,,.,,..,,,., Come in and take a look at our full line of new Fords. If we don't have it we can get it. Freeport Employees: Ask about our Special Pricing on New Fords