Product Pricing Strategy Insights

Description
A basic rule taught in economics is that to benefit from profit maximization, a business will produce the quantity of output where marginal cost is equal to marginal revenue. Whilst this is theoretically true, it is arguably not relevant in practice.

All businesses that sell products or services must master the art of pricing. When thinking about how to price you own product, it is important to keep in mind that pricing is not a specific point but rather a range – between the lowest price that you are willing to sell at and the highest price that consumers are willing to pay.

But, what will determine the final price? How can producers enable themselves to price their products at the higher end of the range? Or, to price the product in a way that facilitates the range as a whole to move upwards?

Drawing on various insights – from gaming, to venture capital, to psychology – this article is intended to guide you through the process of setting a price for your product.

- Bing Gordon (www.kpcb.com & www.entrepreneur.com)
Image Credit: Shutterstock | Enhanced by Entrepreneur