Smarter Pricing: How to capture more value in your market

It’s new, what should I charge?

Pricing places a new product in the spectrum very effectively. Cynical customers disregard advertising claims. The volume of other messages distracts attention from a benefit story. The one concrete aspect of a product launch is the price. It demonstrates how the ‘experts’ in the selling company value the new product compared with existing alternatives. Therefore, the initial price of a new product is a powerful message to the market. It sets a reference price. Managers may be eager to build awareness and demand. Often they will consider a low price to command attention, hoping to lift prices when volume sales are captured. Logical thought but a mistake. Customers will recall the first price they paid and resent ...