Invest Like the Best with Patrick O'Shaughnessy

Madhavan Ramanujam - How to Price Products - [Invest Like the Best, EP.298]

177 snips
Oct 11, 2022
Madhavan Ramanujam, author of "Monetizing Innovations," shares his expertise on product pricing strategies used by major companies like Porsche and Uber. He highlights the pitfalls of traditional pricing, stressing the importance of focusing on customer benefits over features. Key discussions include integrating pricing early in product development, understanding customer motivations, and avoiding common mistakes like 'feature shock.' Ramanujam emphasizes the pivotal role of leadership in fostering a pricing-focused culture for innovation success.
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ADVICE

Early Pricing Testing

  • Test product pricing early and often.
  • Design products around customer needs, values, and willingness to pay.
ANECDOTE

Porsche's Cayenne Success

  • Porsche designed their SUV, Cayenne, by testing pricing and features with customers before production.
  • This customer-centric approach led to Cayenne's success, accounting for over half of Porsche's profits.
INSIGHT

Product-Market Pricing Fit

  • Don't just aim for product-market fit; strive for product-market pricing fit.
  • Price is not just a number, it is a measure of value, reflecting how much customers want your product.
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