**Expanded Pricing Strategy: Balancing Affordability, Value, and Long-Term Growth** Boaz Trading PLC’s pricing strategy is designed to penetrate Ethiopia’s price-sensitive SME market while laying the groundwork for premium service adoption. By combining tiered pricing with psychological tactics and PPP adjustments, Boaz ensures accessibility without sacrificing perceived value. --- ### **1. Tiered Pricing Structure** | **Package** | **Price (ETB)** | **Target Client** | **Inclusions** | |--------------------|-----------------|----------------------------|-------------------------------------------------------------------------------| | **Basic** | 10,000 | Micro-SMEs (1–10 employees)| - Essential compliance audit <br> - Simplified financial health report <br> - 1-hour consultation | | **Premium** | 25,000 | Small Enterprises (11–30) | - Full-scope audit (IFRS aligned) <br> - Fraud risk assessment <br> - Tax filing support <br> - 3-month Boaz Portal access | | **Enterprise** | Custom (50k+) | Medium SMEs/NGOs/Exporters | - Bespoke audits (sector-specific) <br> - ESG compliance reporting <br> - Investor-ready financials <br> - Priority support | **Rationale:** - **Basic**: Priced at **~$182** (official rate), this targets micro-SMEs with revenue <5M ETB. At 10,000 ETB, it’s **35% cheaper** than local competitors’ average (15,000 ETB), but includes tech tools (portal access) they lack. - **Premium**: At **~$455**, this appeals to scaling SMEs needing IFRS alignment for loans or partnerships. Bundling tax support justifies the 150% markup over Basic. - **Enterprise**: Flexible pricing for complex needs (e.g., a textile exporter requiring EU sustainability audits). Margins here offset Basic/Premium discounts. --- ### **2. Psychological Pricing & Bundling** - **“9-Ending” Pricing**: Basic at 9,999 ETB (perceived as “under 10k”) vs. 10,000 ETB. - **Bundled Discounts**: - **Audit + Tax Bundle**: 25,000 ETB (save 5,000 ETB vs. à la carte). - **Annual Subscription**: 45,000 ETB for quarterly compliance checks (20% off). - **Freemium Model**: Free “Mini-Audit” (3-hour review) to upsell SMEs to Basic/Premium. --- ### **3. Purchasing Power Parity (PPP) Adjustments** - **Localized Affordability**: - A 10,000 ETB audit equals **~1.5%** of a micro-SME’s annual revenue (avg. 650k ETB), vs. 3–5% in Kenya. - Premium tier costs **~3.8%** of a small SME’s revenue (avg. 650k ETB/month), deemed affordable for loan-seeking businesses. - **Sliding Scale**: Offer 10–15% discounts for SMEs in low-margin sectors (e.g., agriculture). --- ### **4. Competitive Positioning** | **Competitor** | **Price Range (ETB)** | **Boaz’s Edge** | |---------------------|-----------------------|---------------------------------------------------------------------------------| | Local Firms | 8,000–15,000 | Tech integration (Boaz Portal), IFRS compliance, park-driven trust-building. | | Multinationals | 100,000+ | 80% cost savings, localized SME expertise. | --- ### **5. Payment Flexibility** - **Installments**: Split Premium fee into 3 monthly payments (8,333 ETB/month). - **Barter Options**: Accept in-kind payments (e.g., ad space in a client’s retail shop). - **NGO/Startup Deals**: Deferred payments for pre-revenue startups or donor-funded NGOs. --- ### **6. Currency & Inflation Hedging** - **USD Pricing for Exporters/NGOs**: Charge 50% of Enterprise fees in USD to hedge against ETB depreciation (parallel rate: ~90 ETB/USD). - **Annual Escalation Clause**: Raise prices 5% yearly to offset inflation (Ethiopia’s 2023 rate: 34%). --- ### **7. Strategic Goals Supported** 1. **Market Penetration**: Basic tier undercuts local firms, capturing price-sensitive micro-SMEs. 2. **Upsell Potential**: 30% of Basic clients are projected to upgrade to Premium within 2 years. 3. **High-Margin Growth**: Enterprise packages target NGOs/exporters with budgets 5–10x larger than SMEs. --- ### **8. Risk Mitigation** - **Price Wars**: If rivals undercut Basic, emphasize bundled value (e.g., “10,000 ETB = Audit + Portal + Workshop Access”). - **Default Risk**: Require 50% upfront payment for Enterprise clients. - **ETB Volatility**: Use forex derivatives to lock in rates for critical imports (e.g., audit software licenses). --- **Conclusion** Boaz’s pricing isn’t just about fees—it’s a **behavioral tool** to drive market transformation. By making audits accessible (Basic), rewarding growth (Premium), and catering to elites (Enterprise), Boaz aligns with Ethiopia’s economic ladder. The park’s trust-building events and tech perks justify slight premiums over local firms, while undercutting multinationals by 80%. This tiered approach ensures Boaz isn’t just another auditor but a **growth partner** for Ethiopia’s formalizing economy.