Some data showing how CEOs are finding price points for their new products and services.
According to pricing expert Tim Baye, an associate professor at the University of Wisconsin-Extension in Lancaster, small-company executives are getting more sophisticated at pricing their products and services. One factor: souped-up computerized accounting systems. Still, small-company executives report that they use a wide range of methods to set prices.
Source: Survey of executives at 180 small and midsize companies, conducted by TEC, 1996.
Which approach did you use to price your most recent new product or service?
Cover cost and make a fair profit
Charge what the market will bear
Price relative to related products/match what competitors charge