A successful pricing strategy is your means of making a profit today and tomorrow, not of recovering costs spent a year ago. Use the current costs of developing your new products as the basis of the price of your current products.
Establishing a pricing strategy is an activity that should be completed before you start product development. The only way to accurately determine how much money you can afford to spend on development, support, promotion and the other costs associated with a product is to analyze how much of that product you will sell, and at what price. That’s the heart of a successful pricing strategy.
Strategic pricing is the effective, proactive use of product pricing to drive sales and profits, and to help establish the parameters for product development. Used wisely it is a clearly powerful tool for successful marketing strategies.