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market pricing

updated fri 29 sep 00


Christopher Anton on wed 27 sep 00

Reading some of the discussion on pricing based on what other potters =
are getting engendered a few thoughts.

First of all, one should probably determine whether one is producing =
ware that is virtually (in the eyes of the consumer) the same as =
everybody elses, i.e. is it a commodity. In a commodity market, sales =
are more price based. In other words, if there is little to =
differentiate one tea pot from another, the lower price wins.

On the other hand, a franchise product is one where differentiation =
exists. Tea pot "A" is clearly different from tea pot "B." Now the =
question becomes how much does the consumer value that difference?

As has also been noted, price itself can affect perceived value. =
Several years back I was a partner in a vinyl siding company. We =
underpriced the competition by at least six thousand dollars, did top =
quality work, and used one of the best product lines on the market. We =
went broke. Customers compared our prices and figured that something =
was wrong with our materials, workmanship or both. We had a hard time =
showing that our savings was on low overhead and low profit margin. =20

Believe it or not, often one of the best means to judge customer =
valuation of your product is simply to ask them what they think of your =
offerings and pricing. Many will just give vague approvals, but there =
will always be some who will give honest insightful responses.

- Chris