Setting price points

Don Y · 2020-11-25T16:29:27+00:00

I suspect most of us routinely deal with determining product *costs*. And, have little say (or interest) in *prices*. Having said that... I'm hosting an offsite and one of my colleagues has asked to have a review of a pricing policy (that has been recommended to him) placed on the agenda. I, frankly, don't see how any of us will be qualified to comment on it's accuracy as we're not expert in the application domain he's targeting. (If it was "yet another" product similar to those that he's already brought to market, I suspect he wouldn't have needed such an analysis!) But, what are the sorts of issues that we should challenge in that analysis? Obviously, the qualifications of the folks who prepared the analysis. Their knowledge of the market today -- as well as predictions for the future. Their knowledge of The Competition in terms of motivation and capability. Impact on my colleague's existing business and product lines. Size of investment (and risk to recovery) Etc. I can't imagine we'll come up with anything that a /capable/ analysis hasn't already taken into account. So, the exercise will likely be one of assuaging (or aggravating!) his fears as to the analysis's competency.

Nov 25, 2020 26 Replies

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John Larkin 5 years ago

We do that all the time. The first order is just that, and is an indicator that at least someone wants the product.

If a customer pays for units only, there is no conflict. If they pay any one-time fee, we make it clear in advance whether they have any design rights. We prefer to make it clear that we are customizing our proprietary technology to their needs and that they have no ownership. Somtimes they have exclusivity for a limited time.

With no NDA, the seller can sell to others, but has no IP protection beyond the usual copyright or patent.

John Larkin Highland Technology, Inc trk The cork popped merrily, and Lord Peter rose to his feet. "Bunter", he said, "I give you a toast. The triumph of Instinct over Reason"

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Phil Hobbs 5 years ago

We do that too. Our preferred mode is know-how licensing plus NRE for customization. Seems to go down pretty well in general.

Cheers

Phil Hobbs

Dr Philip C D Hobbs Principal Consultant ElectroOptical Innovations LLC / Hobbs ElectroOptics Optics, Electro-optics, Photonics, Analog Electronics Briarcliff Manor NY 10510 http://electrooptical.net http://hobbs-eo.com

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whit3rd 5 years ago

I once heard from an architect, that he'd seen a house exactly like his design for a customer; he sent that other homeowner a bill. The homeowner paid it. Usually, the architect has to provide plans, oversee contractors (decide when they're paid) and deal with any emergencies that require change of plans, but... customarily, the plans are only provided FOR ONE PROJECT, and reusing the plans means he gets his cut, again.

The first homeowner had tossed a copy of the plans to a friend...

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