OnDemand WTP Pricing Research

What is a Diaper Worth? An Example of Value and Pricing | Drew Boyd

When it comes to pricing a product, one principle rises above the rest.  A price is inextricably linked to the value a customer places on that product. If a customer thinks a product is worth the price you’ve set, they will purchase it. And the more they value the product, the higher the price you can set.

A recent article in The Wall Street Journal illustrates this dynamic in crystal clear form. A survey of current trends in the diaper industry show that parents are willing to pay a premium price for diapers when a particular diaper brand helps them care better for their baby.

As the article notes, the demand for diapers has declined in recent years as the U.S. birth rate has declined. This trend creates a challenge and an opportunity for diaper manufacturers such as Kimberly-Clark and Proctor & Gamble Co. It’s significant that both companies have increased their diaper prices successfully without compromising sales of less expensive brands despite this trend.

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What is a Diaper Worth? An Example of Value and Pricing | Drew Boyd.

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