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Setting prices for new products doesn’t need to be a guessing game. Sound market information combined with a strong pricing strategy will hit the mark every time. And, while setting prices for new products is critical, every new product must have a pricing strategy that considers pricing over the life cycle of the product. Three factors are critical in setting new product prices.
PricePoint Partners considers all of these factors when addressing new product prices. Understanding true costs is a key factor in setting price floors… floors that prevent you from selling products and services at a loss or minimum margins.
While costs are often easier for companies to measure, a challenge for most firms lies in the ability to accurately measure perceived value. PricePoint Partners are experts at executing market research that identifies value perceptions and pricing threshold. If you knew exactly how customers value delivery versus product performance versus price, how would it change the way you set prices? When you know precisely how customers value your products and services you are able to set prices accordingly.
Competitive positioning is always a factor. PricePoint Partners assesses competitive value through the eyes of your customers. Knowing how customers perceive your competitors products and services allows you to accurately position your product in the marketplace.
Utilizing value mapping techniques allows the integrated use of costs and perceived value to identify pricing targets.
In the end, you will know precisely where to set prices, have a pricing strategy over the product life cycle and be prepared to respond to competitive moves.