Page 65 - Customers Final
P. 65
FROM IMAGINATION TO SUCCESSFUL PRODUCT LAUNCH
Materials or cost of all the hardware = 20
Cost of people to make the product or cost of people you
will use to get the product or service to the market = 10
Overheads = 8
Total Costs = 38
Cost by value
This is the price you think the customer will pay
according to what you think the customer is willing to
pay vs the actual cost of the product or service.
Even if you think the customer will pay more you only
charge what you think the customer will pay. This is a
good strategy if you have an accurate picture of your
costs. By keeping the price lower, you could be
encouraging your customers to remain loyal.
Cost of the competition
This is the cost that your competition is charging and
you move your prices up and down to always be
46
