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Pricing for Product Managers

An overview of pricing

Pricing is a critical aspect of building a successful product business yet most PMs know very little about it. In this brief

Pricing is far more than simply attaching a number to your product. It's a complex discipline that involves strategy, psychology, market analysis, and a deep understanding of your product's value proposition. In fact, pricing has become such a critical aspect of business that many organizations now have dedicated professionals, such as pricing managers, focusing solely on this area.

Throughout this briefing, we'll explore the multifaceted world of pricing. We'll start by examining the conceptual framework of pricing, viewing it both as a transactional exchange and as a reflection of the value your product creates. We'll then dive into the components of pricing models, various pricing activities, and examples of software pricing models that are prevalent in today's market.

You'll learn about different pricing approaches, from cost-based and value-based to market-driven strategies, and understand when and how to apply each. We'll also discuss how pricing responsibilities are typically distributed in organizations of various sizes.

By the end of this briefing, you'll have a solid foundation in pricing theory and practice, enabling you to make more informed decisions that can significantly impact your product's success and your company's bottom line. Remember, effective pricing is not just about maximizing short-term revenue—it's about finding the sweet spot that attracts customers, reflects your product's value, and contributes to long-term business growth.

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