Having a market day in school? Here’s a free market day lesson plan on pricing to help your students and kids price their products and services.
Market Day in school is so cool!
Not only do your kids get to be creative and put on their entrepreneurial hats, but they also get lessons in customer relations, economics, and pricing.
Any entrepreneur – kidpreneur or business professional – has got to know how to price their products and services.
And even though it’s usually one of the last steps a student takes to prep for market day at school, it’s one of the most important ones.
Let’s face it: if they price too high, then no one will buy even the best, most unique market day projects, and your students might walk away with a few tears.
If they price too low? Then they might not even break even on the costs of producing their product, and will likely sell out in 10 minutes.
This pricing activity is going to make pricing a product much easier for your students. Not only that, but they’ll use their brains, they’ll collect some market research, and they’ll feel more confident in selling their market day project.
6 Questions to Help Price Your Market Day Product
It can be hard (or at least feel hard) to price a product or service.
Even adults have trouble doing this!
I’d like to make this wayyyy easier for your students by offering several key questions they need to answer in order to come up with how to price their market day creation.
Question #1: Who is Likely Going to Buy from You (Your Customer)?
Take a few minutes to write down who is your customer. And you know what? You need to drill down even more specific to who at the market day is likely to be interested in what you have.
Because not everyone who comes to market day is going to be interested in what you have.
Do you think any gender would buy your product, or is it just for guys, or just for girls? Do you think a parent who brings their kids to market day would be interested in your product, or just kids? How old are the kids who will be at your market day?
Question #2: How Much Money Will Your Customer Likely Have to Spend?
Think about the customer you identified above. How much money will they likely have to spend?
Do people in the age range have part-time jobs? Full-time jobs? Do they get an allowance? Do they need to earn their money through chores?
An estimate is fine, here.
Question #3: What is One Unit of Your Product?
You need to know what makes up one product of sale for your customer. Is it one finished item, or three? Is it half an ice-cream scoop, or 1 lb. of product?
Figuring out how much of a product you’re selling and counting as “one unit of product” will help when you price it, as you’ll know how much materials go into making one unit. And when you know the cost of materials, you’ll be able to figure out the cost of your production of one product.
Question #4: How Much Does it Cost to Make Your Product (Production Costs)?
Think about your product. What does it cost to create one of it?
How much of your time does it take to create one? List out each material you need to create one complete product. Then, list out the cost of each of the inputs (materials).
If you bought a package of something that had a bunch of materials in it that creates more than one product, then take the cost of the package, and divide by the number of products you can make from it.
For example, let’s say you need 3 pipe cleaners to make your product. You bought a package of 200 pipe cleaners for $6.49.
Each pipe cleaner in that package costs $0.032/pipe cleaner (you find this by dividing the cost $6.49 by the number in the package, 200).
You then would multiply that cost per cleaner by 3, since you need three to create your product. This means for just the pipe cleaners, your input cost is $0.097 (you might want to round up to $0.10).
Do this for each of the materials you need to make your product.
Don’t forget to include your packaging costs (the box, container, plastic bag, etc. that you’ll put your sold products in to give to your customers).
Luckily, since it’s Market Day, you really don’t have distribution costs – the cost of distributing/shipping/getting your product to your customer because you’ll be at the actual event handing the product over. You also will have the advertising and marketing done for you, as it’s a school-wide or class-wide event. So no marketing or advertising costs, either.
But if you’re trying to price a product outside of market day? Then you’ll definitely need to keep these things in mind.
Pro Tip: Think about your packaging as part of your marketing
Choose your packaging wisely, as it can be one of your best marketing methods on the day of your Market Day.
That’s because if you package your product in a cutely, or in something that is see-through, people will get curious and ask the kid carrying it around where they got it from.
They’ll point right to your booth/desk, and you might just have made yourself another sale.
Question #5: What Does the Competition Price Similar Products at?
At a Market Day, you’re in “competition” with the other suppliers (aka, kids and teens selling their own products). So, you’ll want to check out others’ products that are similar to yours and get an idea of what they are selling it for.
If you’re creating a product to make and sell outside of Market Day, then your competition includes stores. You want to figure out what similar products cost in the store versus what you’re asking a customer to pay.
Think about what stores your customer could go to to buy something similar to your product, and then check out how much a similar product to yours in the store costs.
Keep these prices in mind when pricing your own product to sell.
Question #6: How Much Do You Want to Price it For?
It’s always a good idea to gut-check and see how much you’d like to price a product for. After all, it’s your time and energy and money and creativity that has gone into making it!
After your students answer each of these questions, they’ll be able to come up with a range of pricing options based on both their own desire and gut, the competition, their customer, and on making a profit.
A student’s pricing range might look like between $4.50 and $7.25 per product. Here’s where more of the art of pricing comes into play – your student will need to pick a price within this range. If they want to be safe? perhaps they go with the middle price in-between the upper and lower number in their range.
Remind your students that they can always adjust pricing during the actual Market Day based on kid feedback and customer feedback. In other words, if their product is not selling, they might do a short-term sale and drop the price by a $1.00. If it’s selling out too fast? Then they might have under-priced, and can increase their price in $0.50 increments.
The important point is, after doing this market day lesson plan, pricing a product will no longer be a guessing game after these exercises.
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