New Product Pricing Model

New Product: Pricing Model

Calene M. Feavaai

Webster University

PROC 5830

Table of Contents

Abstract 3

Pricing Models 4

Summary 13

References………………………………………………………………………………15

Abstract

You have only one chance to get new product pricing right. If you set your prices too high you could lose valuable market opportunities. If you set your prices too low then you are at risk of leaving money at the table. Setting prices for new products does not need to be a guessing game. You can start by conducting sound market research information combined with a robust pricing strategy and this will hit the mark every time. And, while setting prices for new products is very critical, every new product must have a pricing strategy that considers pricing over the life cycle of the product. Understanding true costs is a key factor in setting price floors, floors that prevent you from selling a products and services at a loss or at minimum margins.

Pricing accomplishes far realization effects way beyond the cost of the product. Pricing is just as important and sets a very important statement as well as it defines the cost to purchase the product. Pricing defines the entry inception: who your buyers are and their compassions, towards your product, which type of competitors you will encounter, who you will be negotiating with and what the customers' expectations will be. The most important thing in developing any marketing strategy, including pricing approach, is to understand as much as possible about your current customers and potential future customers. The more you know about their motivations, compassions, needs, and their own customers, the more likely you will be able to maximize both the effectiveness of your product as well as your own revenue stream. The purpose of this research paper is to explore the interrelation between new product and the pricing strategy it takes to make it a success.

Pricing Models

A new start up products pricing...