The “right” price is not one number, determined by numerical analysis. Too many factors influence it. It’s a mystery you cannot fully solve. It’s a pursuit that can occupy you for a lifetime. Source: The Tao of Pricing.
“If you open yourself to insight, you are at one with insight, and you can use it completely.” — Source: Tao Te Ching. “If you open yourself to the mysteries of pricing, you open yourself to riches.” Source: The Tao of Pricing.
A bottle of Coca Cola to a man lost in the desert is priceless. Source: The Tao of Pricing.
“Reasonableness” varies for component prices, based on their percentage of the overall cost. Steel prices must be more “reasonable” to a car manufacturer than the price of the horn. Yarn prices must be more “reasonable” to a needlepoint kit compiler than the price of the needle. Source: The Tao of Pricing.
When emotions are high, buyers are less price sensitive. Examples: Long-stemmed roses to a man newly in love. Or the fees for a home security system after a break-in. Source: The Tao of Pricing.
To buyers, discounts are always “fair.” Increases are not. Instead of raising your prices for peak times/faster service/etc., raise them across the board. Then discount them for off-peak/slower service/etc. Source: The Tao of Pricing.
What’s “reasonable” for a bottle of beer? $1 in a supermarket? $3 in a bar? $7 in a stadium? Therefore, shouldn’t your prices vary likewise in different venues? Source: The Tao of Pricing.
A “reasonable” price is dependent upon the category of the product. Therefore, wise marketers position their products in most-favorable categories. Example: A newsletter costing $495 is an expensive publication — but cheap business advice. Source: The Tao of Pricing.
Alternatives matter. Customers who believe your $19 price is fair… won’t pay it if they know about equivalent (in THEIR minds) alternatives for $12. Source: The Tao of Pricing.
Price “reasonableness” is in the mind of the buyer. Examples: A 10% better soap might not be worth even a penny more to buyers. A 10% better wrinkle cream might be worth 500% more. Source: The Tao of Pricing.