im new to this site and im hoping you can help me :) i am in the midst of starting my own business and this will be a big part of my market research :)
i will specialise in wedding cakes / occasion cakes, they will all be bespoke prices, however for other bakery items such as cookies, muffins, cupcakes, scones and big cakes (eg. victoria sponge) im just trying to find out what sort of prices people would pay generally? for example how much would you pay for 1 plain vanilla cupcake with basic vanilla buttercream frosting? compared to a triple chocolate chip cupcake with a chocolate fudge frosting?
ive recently come off of a business course with the princes trust and they strongly advise to ask people what they are willing to pay for it before considering how much money it costs me to make and how much i want to pay myself, so thats what im doing :) it would help if people would comment with how much they would pay for a basic vanilla cupcake with buttercream, and for a chocolate fudge cupcake or if it will help i will list all the flavours i will be selling :)
vanilla, chocolate, carrot, red velvet, lemon, caramel, maple and walnut, banoffee, victoria sponge, white chocolate& raspberry, choc chip and blueberry and vanilla :)
Thanks in advance!
You're right that it's important to gauge the amount people are willing to pay, but that amount will vary greatly depending on a variety of factors (disposable income, event type, price of competitors, etc.). Ideally you'll want to target your marketing efforts toward customers who can pay more.
Getting this information from your local market can be difficult, so one alternative is to use a starting point based on your cost (ingredients, overhead, and labor) plus a markup of 20% or so for profit. See if this is in line with prices of competitors in your area and if it makes sense for your market.
First responses will be location, location, location. Yes, that affects your price (rent, cost of raw goods, etc.) but it also affects customers.
If I am at Disneyland, I may "treat" the kids to some over priced treat that I would NEVER consider in daily, commuter life. If I am on vacation in some resort area, they too, may get more $$$ from me as well.
So, at least for our best answers, can you add:
"I am in resort area, with lots of tourists, on the strand across from the beach" or "I am in my mid-sized towns popular strip mall", or whatever.
As a daily item, I might pay $1 for the plain, and $2 for the fancy. In a resort, I may pay $2 for the plain, and $4 for the fancy. ***based on "singles" and not "dozens".
Yup, cheap, but I am in a mid-sized American town with lots of competition and low rents.
Thank you very much! both of you! very helpful :)