Pricing is about value, which is not surprising. One way to find a suitable price for your product or service is to create a matrix with two axes, as Steve Johnson explains:
- Number of alternatives
- Effort of doing it myself
A smaller number of alternatives increases pricing potential as well as a higher the effort of doing it myself does (Make-or-Buy). The article has a nice illustration.
Pricing is something of allegedly minor importance, and this is why many businesses fail to earn money.
Here is another list of questions to ask when pricing your product. I think the list is pretty good and a very good starting point for and exhaustive price analysis.
Startup companies create great new products and want to earn huge amounts of money with it. Existing companies launch new products and need to create a positive cashflow from them.
Why is pricing, unlike product development, often performed so randomly then?
At the Product Discovery’s blog, Jim Semick lists the most common errors of product pricing. Avoid them.