About Best Practice Pricing

In today's economic environment companies must make every possible effort to retain and if at all possible, increase, their profits. Instituting good pricing practices is one of the most powerful ways to combat the rising costs of energy, transport raw materials, just to name a few. Yet, only a small number of companies seem to care at all about best practice pricing, resorting to erroneous methods they are familiar with, like "gut feel", "market price" or "cost plus". Why? Well, because cost cutting has been the mantra of business for the last 30 years or more, and most companies don't really know what best practice pricing means.

Wednesday, January 27, 2010

iPad pricing comments

- Apple followers are not price sensitive and typically want "the best", thus, a relatively high price of the 3G 64GB model is a way for Apple to quickly re-coupe the development cost. Recall how successful the iPhone was with a very high price for a phone.
- The "odd" pricing of the 3G modes ($629, $729, $829) is a way of framing to WiFi models too appear more affordable at their $499, $599 and $699 prices, thus they will easier penetrate a more price sensitive market segment.
- It is a stroke of brilliance to price (most of) the products considerable lower then the $1,000 that the rumor mill expected. And lower then Lenovo's and (I think) Dell's tablet computers.
- The iPad will not make a dent in the netbook market for some time; it is too different, too expensive and too much Apple. At current prices it appeals to Apple users who don't want the windows experience (like me) and therefore have not yet bought a netbook. As prices of the iPad will drop significantly over the next year to two - this will change.

Per Sjofors
Founder/CEO
Atenga Inc
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