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How are pricing and perceived value of a product related?

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2 Answers
  1. Daniel Kish
    Daniel Kish

    FICO Sr Director Strategy & Pricing • 3y

    The price is traditionally based on two things: How much value the thing is or has created How much the provider splits that value capture with the customer Some strategies say minimize #2. That would be Google Ads (take a small slice of a huge pie). Other strategies say maximize #2. That would be Warner Bros. Studios (take a bigger slice for the risk of fronting cash on a blockbuster movie). I weirdly view those two levers as independent (you can measure #1 somewhat objectively within a range, ...Read More

    1,142 Views
  2. Alex Chahin
    Alex Chahin

    Uber Director, Global Head of Rider Product Marketing | Formerly Lyft, Hims & Hers, American Express • 4y

    Price acts as a huge quality signal. One of my favorite studies on the subject is one done by Professor Dan Ariely. He had a hypothetical painkiller he called Veladone Rx. In reality, in this experiment, it was nothing more than a sugar pill. There was no actual active medication in it. But the participants didn’t know that. It was paired with literature that said “clinical studies show over 92% of patients report relief in 10 minutes.” In the first variant, people were told that the drug cost $ ...Read More

    1,070 Views

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