Pricing vs your competitors

While you should always be aware of you Marketing mix, it is sometimes quite difficult to assess a right level of price for your products especially in face of competition.

There are many aspects one can think of, recipes, intuitions or other "obvious" facts. You can work it out from your cost (which may not capture the value of your product), or define the price and then work down to the cost of manufacturing it.

However, among the most interesting solutions that I found was a suggestion from the Harvard Business review. It is easy enough to implement and quite elegant.

It basically consists in defining the primary functions that customers will look for in your product, as well as the secondary ones. Score them for their functional value and plot them against their price. Very quickly this yields a picture of where you position yourself in regard of competition (assessed on the same primary and secondary functions) and your peers products from the lower to higher range. You can also vary the importance of the secondary functions by attributing more weight to the primary functions and less to the secondary ones.

Gilles Daquin at http://gillesdaquin.blogspot.com