Pricing FundamentalsConversation Rachel Rachel Setting the right price is a function of many factors...COSTS, COMPETITION, PRODUCT FEATURES, CUSTOMER NEEDS, determining the VALUE to customers and aligning with business goals. This list of ingredients can be constantly changing, so it requires a marketer to be vigilant. Customers window shopping Rachel Rachel Of all these, sorting out VALUE is a key element in determining PRICE. What is a product worth to your customers? If you design a product that exceeds the expectations of your target segment, that customer will always be willing to pay more. Rachel Rachel Review the PREFERENCES in the MARKET SURVEY under SEGMENTS to see what matters to OUTDOOR ENTHUSIASTS. Also note their expectations for what they would typically pay for a backpack. Rachel Rachel Let's assume that the selling price is close to the $90 AVERAGE PURCHASE PRICE in the MARKET SURVEY. Now, build your BACKPACK. As you select design elements that create VALUE for your customers, try and achieve a PRODUCTION COST that does not exceed 50% of the AVERAGE PURCHASE PRICE. Rachel Rachel What did your backpack design total up to? $0 - $30 $31 - $44 $45 - $54 $55 - $64 $65 - $74 +$74