Product Management How should we price our products? *Article was proofread using eAngel.me*

1. Product Management
Nadav Benedek
Pricing Methods

2. Product Management | Pricing Methods Nadav Benedek
Our mission is lorem ipsum dolor sit amet, consectetur adipiscing elit.
Why now?
+60% teens will
regularly wear a
connected
device by 2016
How should
we price our
products?

3. Product Management | Pricing Methods Nadav Benedek
Value Pricing
What is the value for our
customer?
● How much time/money are we saving
for our customers?
● What is the WTP (Willingness To Pay)
of our customers?
● Can we apply Price Discrimination, or
must we present an equal price for
everyone?

4. Product Management | Pricing Methods Nadav Benedek
Cost+ Pricing
How much does it cost for us?
● How much does it cost for us?
● What is the desired margin?
● Don’t forget Fixed Costs & Marginal
Costs. Total cost changes, and it
depends on quantity.

5. Product Management | Pricing Methods Nadav Benedek
Competitive
Pricing
Comparing our pricing against
our competitors’.
● Is our product identical to our
competitors’? Is it different? Can it be
different?
● If we price too low -> Price Wars.
● How many competitors do we have?
What are the minimum & maximum
prices out there?
● Do we really want to be the cheapest?

6. Product Management | Pricing Methods Nadav Benedek
Psychology
Get into the minds of our
customers.
● Sometimes a higher price can signal a
higher quality.
● What’s our messaging?
● If we are the cheapest, what does it
mean? Will our customers believe that
we’re both the cheapest and the best?

7. Product Management | Pricing Methods Nadav Benedek
Slack
Have we left enough slack?
● Have we left enough slack for potential
discounts?
● What about partners, distributors and
resellers? Do we have enough slack for
them?
● What about agents? If we have agents,
we should have enough room for
commissions...
● Leave slack for special promotions.
● Remember: It’s easy to decrease the
pricing, but increasing it is not always
easy...

8. Product Management | Pricing Methods Nadav Benedek
Experimental
Pricing
Can we play with our prices and
see the effect?
● Price Elasticity. If we change the price,
what will be the effect on the quantity we
sell?
● Revenue = Quantity x Price.
● Will inconsistent pricing make our
customers angry?
● Can we A/B test it?