Despite what the common sense would tell you, the fact is that we all act stingy on things we need but don't really want. Conversely we are generous on things we want - but do not really need.
That is why a customer may prefer to spend 3 times on a BMW than a Kizashi which is almost as good. But when it comes to disposable ball pens, the same customer may choose a Rs 5 ball pen over Rs 8 !
I have always believed that you should generally not under-price yourself for premium, luxury products. In fact you should raise prices! How many know the case of the famous Tag Heuer watch brand : it did not sell well at popular price so they raised the price to make it exclusive and the rest is history.
Whenever you are tempted to lower your price compared to your rival X because his brand awareness and value is more, ask yourself if you would rather let a prospect walk away saying "I wish I could afford his product" OR " If the price is what it is, I wonder if the product is really as good as I thought it was"?"
Ask yourself - is your shirt the cheapest you could find? is your vehicle the cheapest available? in fact almost nothing that you purchased in the last 1 year was the cheapest in that category. Then why do you assume that the rest of the world is any different from you?
