Price Point design principle

When considering pricing your product, you are considering more than the cost of the parts + some percent for profit. You also have to consider the other factors at play. For instance, what is the value in the mind of the consumer, regardless of your costs? What is the perceived value in the consumer’s circle of colleagues and friends? Do the consumers have experiences that might degrade their perceived value of your product? You have to choose the price that the consumer is after, the one that they can justify for themselves or others.

$35 is the new $19.99

I’ve noticed a trend that reminds me of my younger years. I remember watching commercial after commercial for products offered at the magic price of $19.99. But recently, there seems to be another magic price, one that no one would blink at. $35.00 is the new $19.95, it seems, and I have some examples to show what I mean. I gave a presentation at Cherry Hill Public Library recently where I talked about these, and so they were fresh in my mind. I included the presentation below.

Successful Examples:

• The ChromeCast – Google’s smart TV in a dongle, sold out about a day after its announcement. Google is particularly sensible about pricing generally, though I think the Chromebook Pixel may be an exception. ChromeCast offers the ability to run app content from apps like Netflix and Google Play Music on your HDTV with the great surround sound, and allows you to control it from your phone, tablet, Chromebook, laptop, or desktop.  I use it all the time, and often bring it with me as a backup for presentations, since I can run presentations on it using Google Drive.
• The Raspberry Pi – This is a $35 computer, very simply put. You’d need to BYO keyboard, monitor and mouse, but once you have those, you have a rich, powerful desktop machine. You can also use it as a headless server, with remote access.  You could set it up as a design workstation, with apps like GIMP, Inkscape, and Scribus. You could use it as a media server complete with a navigable interface in the form of XBMC. You could use it as a security system with a motion sensor, and camera. The possibilities are endless, and what a great price point.
• The Arduino Uno – The Uno is a great electronics learning and testing platform from Italy. It is less than $35, often available for as little as $25. The Arduino has a higher learning curve than the others here, but also potentially has the greatest flexibility and rewards. You can use Arduino for home automation, light shows, and any other electronics project you can think of. You use an open source programming language called Processing to make sketches to direct the inputs, like switches and sensors, and outputs, like LEDs. It’s products like this that allow you to “scratch your own itch”.

Here is my presentation on these devices.

And here is my presentation on Context, Connectedness and the self, a look at the ways that sensors are increasing in importance.

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