You are here

New Product Pricing Strategies

You have only one chance to get new product pricing right.

Set prices too high and lose valuable market opportunities.
Set prices too low and leave money on the table.

Setting prices for new products doesn’t need to be a guessing game. Sound market information combined with a strong pricing strategy will hit the mark every time. And, while setting prices for new products is critical, every new product must have a pricing strategy that considers pricing over the life cycle of the product.

Download Your FREE Guide to New Product Pricing Strategies 

Three Key New Product Considerations

Price Point Partners price consultants consider all of these factors when addressing new product pricing.

  • Cost: What does it cost to produce this product? How will costs be used to set pricing floors?
  • Perceived Value: What does the market really think of our product? How do they value it?
  • Competitive Positioning: How are our competitors positioned in the marketplace and how are their product lines valued by consumers?

Understanding true costs is a key factor in setting price floors – floors that prevent you from selling products and services at a loss or at minimum margins.

While costs are often easier for companies to measure, a challenge for most firms lies in the ability to measure perceived value with accuracy. Price Point Partners pricing consultants specialize in conducting market research that identifies value perceptions and pricing thresholds. If you knew exactly how customers value delivery versus product performance versus price, how would it change the way you set prices? When you know precisely how customers value your products and services, you are able to set appropriate prices.

Competitive positioning is always a factor. Price Point Partners assesses competitive value through the eyes of your customers. Knowing how customers perceive your competitors' products and services enables you to accurately position your product in the marketplace.

Value mapping techniques facilitate the integrated evaluation of costs and perceived value in the identification of pricing targets.

In the end, you will know precisely where to set new product prices, have a pricing strategy over the product life cycle and be prepared to respond to competitive moves.

To learn more about new product pricing, please view our Guide to New Product Pricing Strategies.