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Pricing new Products
Companies habitually charge less than they could for new products, especially with revolutionary offers. Underestimating a product's value can be a costly mistake, since the introductory price often fixes its worth in the buyer's mind.
The take-away: Good pricing decisions take an expansive, rather than an incremental, approach to new products. Companies should construct a range of possible prices based on the new offer's value to customers and the competitive landscape.
Articles provided by The McKinsey Quarterly
© 1992-2003 McKinsey & Company, Inc
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