How to prevent pricing strategy from cannibalization higher-end products?


2

Lets say my higher end product is like the iPhone 5S and retails for $500. And starting a lower end product like the iPhone 5C.

Should I be concerned that pricing the lower end product will cannibalize potential sales of the higher end product?

What are some strategies around this?

Pricing

asked Feb 27 '14 at 23:33
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Charles Williams
15 points

1 Answer


3

Nicks answer on SaaS pricing is relevant here - he references the Camels and rubber duckies pricing post from Joel Spolsky. Give Joels post a read - especially the bottom part where he goes into consumer surplus and segmentation.

Capturing this consumer surplus and creating a working segmentation model is tricky stuff - but if done right can be quite profitable.

answered Feb 28 '14 at 04:47
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Jim Galley
9,952 points
  • Thanks @Jimg – Nick Stevens 5 years ago

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Pricing