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Ever wondered why two businesses can sell similar products at completely different prices?

Here’s the thing: Pricing isn’t just about covering your costs. It’s also about how you want to position your product in the market.

Whether you’re selling coffee, homemade pastries, or handmade products, choosing the right pricing strategy can make a big difference.

Let’s explore five strategies you can try!

1. Cost-Plus Pricing: Keep It Simple

This is one of the easiest ways to set a selling price.

Simply calculate your product cost and add a markup.

Example:

• Product cost: ₱100
• Markup: 30%
• Selling price: ₱130

Best for: Businesses that want a straightforward starting point for pricing.

Just remember: Adding a markup doesn’t automatically mean your price is competitive or profitable after all business expenses.

2. Competitor-Based Pricing: Know Your Market

Ever checked how much other businesses charge for similar products?

That’s competitor-based pricing!

For example, if nearby coffee shops sell iced coffee for ₱120–₱150, you might use that range as a reference when setting your price.

Best for: Businesses entering a competitive market.

Friendly reminder: Your competitors may have different costs. Don’t copy their prices without checking your own numbers first.

3. Value-Based Pricing: Focus on What Customers Value

Sometimes, customers are willing to pay more for something they believe offers greater value.

Think of a beautifully packaged handmade gift versus a basic version of the same product.

Customers might pay extra for personalization, convenience, quality, or experience.

Best for: Businesses with unique products, strong branding, or special customer experiences.

The key is understanding what matters most to your customers.

4. Penetration Pricing: Start Low, Grow Later

Launching something new?

Penetration pricing means introducing your product at a relatively low price to attract customers and build market awareness.

For example, you might launch a new drink at ₱99 when comparable drinks normally sell for ₱129.

Best for: New products entering competitive markets.

Just be careful! Make sure your introductory price is financially manageable, and have a plan for adjusting it later.

5. Bundle Pricing: Offer More Together

Why sell products separately when you can offer them as a package?

For example:

• Coffee: ₱120
• Cookie: ₱60
• Bundle price: ₱160 instead of ₱180

Customers get a better deal, while your business may encourage larger purchases.

Best for: Businesses selling complementary products.

Remember to check the combined costs before offering a discount.

So, Which Pricing Strategy Is Right for You?

There’s no single pricing strategy that works for every business.

If your goal is to…	Consider…
Set a simple starting price	Cost-Plus Pricing
Stay competitive	Competitor-Based Pricing
Highlight your product’s unique value	Value-Based Pricing
Attract customers to a new product	Penetration Pricing
Encourage larger purchases	Bundle Pricing

You can even combine different strategies depending on your products and business goals.

Price with Purpose, Not Guesswork

Before choosing a pricing strategy, start with one important question:

Do you know how much your product actually costs?

Understanding your costs helps you evaluate whether your pricing decisions can support your business.

With Kostaraa, you can calculate product costs, review your target selling prices, and explore potential profit margins before making decisions.

Because pricing isn’t simply about choosing a number.

It’s about making that number work for your business.

Cost Better. Price Smarter.

Start Planning with Kostaraa

You know how much you spend making your product. But does that mean you know how much you should sell it for?

Many small business owners confuse costing with pricing. While they work together, they answer two very different questions.

First, What Is Costing?

Costing tells you how much you spend to make a product.

Let’s say you sell iced coffee. Here’s what one cup costs you:

Expense	Cost
Coffee, milk, and syrup	₱40
Cup, lid, and straw	₱8
Labor	₱12
Production overhead	₱10
Total Product Cost	₱70

So, making one iced coffee costs you ₱70.

But should you sell it for ₱70? Definitely not if you want to earn a profit!

Now, What Is Pricing?

Pricing is deciding how much your customers should pay for your product.

Unlike costing, pricing considers more than expenses. Think about:

• How much profit you want to earn
• What your competitors are charging
• What customers are willing to pay
• What makes your product valuable

For example, your iced coffee costs ₱70 to make, but you decide to sell it for ₱120.

That’s a ₱50 gross profit per cup, before other business expenses.

Costing vs. Pricing: The Simple Difference

Costing	Pricing
How much does it cost me?	How much should I charge?
Focuses on your expenses	Considers expenses, profit, and customer value
Helps you understand costs	Helps you make selling decisions

Think of it this way: Costing helps you understand your numbers. Pricing helps you decide what to do with them.

Why Does This Matter?

Imagine selling 100 cups of coffee at ₱120 each.

Sounds great, right?

But what if you forgot to include packaging, labor, or electricity in your original calculations?

Your actual profit could be much lower than you expected.

And here’s another thing: even if your costing is accurate, your selling price might still be too low for your business goals—or too high for your target customers.

That’s why good pricing starts with understanding your costs.

Cost Better. Price Smarter.

Before you launch a product or change your selling price, ask yourself:

• Do I know my actual product costs?
• Will my selling price leave enough room for profit?
• What happens if my material costs increase?

You don’t need to be a finance expert to start answering these questions.

With Kostaraa, you can organize your materials, calculate product costs, and evaluate your target selling prices—all in one place.

Because running a business shouldn’t mean guessing your numbers.

Know your costs. Understand your margins. Make smarter decisions.

Start Planning with Kostaraa