OnDemand WTP Pricing Research

Ten questions to ask when pricing your product | The Globe and Mail

Great products and services don’t guarantee success. You also have to price them correctly, which requires knowing your customers well and what they’re willing to pay, as well as what your competitors are charging. You also might consider market segmentation, product bundling, and both the tangible and intangible benefits you’re selling.

We spoke to four experts and came up with 10 of the most important questions to ask when putting a price sticker on your product. Here’s what they had to say:

1. What’s the customer willing to pay for my product? If a product costs a dollar to make, many companies assume they should charge $2 for it. “That’s what you call cost-plus pricing. Many companies do this, but it’s not optimal,” says Mark Stiving, author of Impact Pricing: Your Blueprint for Driving Profits. “Pricing should only be based on what the customer is willing to pay. If the customer is willing to pay $1,000 for a product that costs you $10 or even $100 to make, you have a successful product. If the customer is willing to pay $1,000 for something that costs $1,000 to make, you don’t raise your price – you get out of that business.” To help determine what a customer is willing to pay, you can conduct market surveys and focus groups.

Read complete article here:

Ten questions to ask when pricing your product.

Post a Comment

WP-SpamFree by Pole Position Marketing