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Businesses don't charge what they think their product is worth. The concept of "thinking what its worth" is silly all by itself. They charge the profit maximisi
by Trundle 9y ago
Businesses don't charge what they think their product is worth. The concept of "thinking what its worth" is silly all by itself. They charge the profit maximising amount in the profit maximising way.
If you could get one customer at $100 or fifty customers at $10, what is your product 'worth'?
- ImSkeptical 9y agoI think you do need to assess what your product is worth, simply because you don't know how many customers you'll get at each price point and if you experiment thoroughly it'll take time and may ruin your market. On the other hand, if I conclude that my product provides X dollars of value to my customer, I know I should be able to set the price at X-Y and get many customers.
- icebraining 9y agoThat's the point, there's no such thing as a fixed amount of dollars of value per customer. You may have found a segment willing to pay X-Y, but you may be leaving a lot of money on the table by not selling to the potentially much larger segment that only gets X/2 dollars of value from your product.