Do you follow a robust process for pricing new products?

What factors do you consider when setting the price for your new product?
- Your costs
- Your margin aspirations
- Competitor pricing
- Business, financial and marketing objectives

Do you also assess, evaluate and quantify customer value?

Pricing is all about maximising profits by understanding, creating, communicating and capturing value within the constraints of your competitive environment, company costs and organisational capabilities.

An automotive supplier to a well-known car manufacturer, priced its park assist at $100 based on costs and margin expectation. The car manufacturer recognised the value of park assist to its customers and sold it for $670. The automotive supplier left significant value and money on the table by failing to recognise customer value.

You don’t want to be making this same mistake!

The car manufacturer that they sold the system to, understood customer value and were able to charge their customers a considerably higher price; $670 vs. $100.

You do need to understand customer value.

If you want to capture a share of value in your price, then you need to invest in value and pricing strategies and implement processes to understand, create, communicate and deliver customer value.

How do you price your new products?