Very good question….and something I run into all the time….
Hopefully….at the start of your process you took the time to truly understand the price structure of any comparable product to yours….if you did this, you should have a really good idea of the price range your product falls into. Say there are 10 comparable products in your category….the lowest is $5.00 and the highest is $8.50….that gives us a product range of $5.00. to $ 8.50 and the average price may be…say $6.75 ….well the first thing you do is take a look at your product and compare it to the others….does it add value enough to bring it to the high end of the range?…or maybe you built it with so much value that it can support a price point above the range – or not. Maybe it’s a lower value than the range itself, or it’s lowest end. You find that out by comparing its features and doing what I call a Benefit – Detriment model.
So for the sake of discussion, you decide that you have added enough true value (also called intrinsic value) to the product that you feel it can be sold for $10.95 …your job is to prove to a buyer it will support the higher price point (really called an MSRP Manufacturer’s Suggested Retail Price) by illustrating that value compared to the comparables. If you can convince them it’s should be the higher price, they will try it…but if it doesn’t work…you will have a much harder time next time you get up to bat.
