The document discusses various pricing methods for products: value pricing which considers customer value and willingness to pay; cost+ pricing which covers costs and desired margin; competitive pricing which analyzes competitors' prices; psychology-based pricing which considers how price impacts perceived quality; and experimental pricing which tests different prices to analyze effects on quantity and revenue. It also notes the importance of leaving slack in pricing for discounts, partners, and promotions.

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?