How to set prices for your go-to-market strategy

What is a go-to-market strategy in the retail sector?

A go-to-market (GTM) strategy is the plan businesses use to launch a new project in a specific market. This project could be a new product or range of products, a new physical store, an eCommerce or expanding presence in new countries. Therefore, defining the right go-to-market strategy is essential when internationalizing any project.

When opening new markets, a GTM strategy aims to understand the chosen market so businesses can adapt their product and value proposition, and select the most appropriate distribution channels.  

How to build a go-to-market strategy 

Follow these steps to implement an effective GTM strategy:

1. Define your value proposition and adapt it to the target market 

Your value proposition is the unique combination of features, benefits and advantages that make your product stand out from competitors. To create a solid value proposition:

• Define your target audience.
• Identify the problems and needs of your target market.
• Study what differentiates your product from your competitors.
• Clearly communicate your product’s unique selling points (USPs).

2. Build an effective go-to-market pricing strategy

When launching in a new market, developing a localized pricing strategy that covers costs, maximizes profits, and considers the competitive environment and potential consumers’ expectations is crucial. Start by monitoring your competitors’ prices and performing a competitor price analysis.  

What worked for you in one market may not be the best fit for another. Here are some pricing strategies that you can implement:

• Cost-based pricing

Defining a cost-plus pricing or cost-based strategy requires an in-depth knowledge of production costs. Once they have been added up, you must determine a profit margin that considers market expectations and your need to make a profit. 

Remember that to succeed, the strategy must adapt to the peculiarities of the local market in which it is implemented.

• Competitor-based pricing

A competitor-based pricing strategy starts by analyzing your competitors’ prices for identical products, as well as those with similar characteristics, or from different brands. Competitor price monitoring tools can greatly simplify this task. 

Then you need to decide if you want to position yourself as cheaper, similarly priced, or even more expensive, if you offer a greater value proposition.  

• Value-based pricing

A value-based pricing strategy sets prices according to the perceived value of your product. You will need to conduct market research to find out how much your customers are willing to pay for products perceived to have similar value. Then set prices that reflect that perception. This strategy requires greater investment in brand positioning to connect with your target market.

3. Develop your distribution strategy

Your distribution strategy determines how your product will reach your target customers:

• Direct sales: Sell directly to customers through your website, sales team, or brick-and-mortar store. This channel allows you to control pricing, customer relationships, and product messaging.
• Indirect sales: Partner with distributors, resellers, or retailers to broaden your reach. This increases visibility but also involves relinquishing control over product pricing and messaging.
• Online selling platforms: Use marketplaces like Amazon or eBay for fast access to a large customer base. This offers greater visibility but also means more competition and higher costs. If you go for this option, tools like Marketplace Sellers Benchmark will help you identify your competitors within the same marketplace. 

4. Create a promotional plan

A well-structured promotional plan is crucial to generating knowledge, interest and product sales. You can employ various promotional strategies:

• Content Marketing: Create engaging content that educates your audience about your product’s selling points. According to Organic vs. Paid Search: (84 Astonishing) Statistics for 2024, “Organic search drives 1,000% more traffic than organic social”.
• Social Media Marketing: Use social media to connect with your audience, share content, and promote your product.
• Email marketing: Nurture leads, drive conversions, and maintain customer relationships.
• Public relations (PR) and media: Generate interest and credibility by preparing a good press kit and contacting journalists to obtain media coverage.
• Influencer Marketing: Collaborate with influencers aligned with your brand values to gain trust and credibility.
• Paid advertising: Invest in paid advertising to increase your reach and attract traffic (SEM, display ads, social media and native advertising).

5. Last but not least: Analyze and optimize your go-to-market strategy

Constantly monitor your go-to-market strategy’s performance and adjust your tactics to improve results. 

Successfully launching in a new market isn’t easy. But with the right pricing strategy, and advanced tools like Minderest’s Competitor Price Monitoring tool, you can adapt and respond to market dynamics immediately, making your products as competitive as they are profitable.