In this episode of the How to Succeed in Product Management Podcast, marketing professor Jeff Shulman and The Product Management Center advisory board members Red Russak and Soumeya Benghanem welcome Divya Sreekumar (Amazon Web Services) and Harish Komaragiri (Facebook) to talk about product pricing strategies. A lot goes into determining the price of a product which includes the needs of the customer, product value, and willingness to pay of the target audience. The panel also tackles the different spectrum of responsibilities a PM has and how it can affect the overall business model.
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01:48 Why PMs need to learn product pricing04:12 Product pricing strategies and modifying existing pricing07:03 Strategizing around pricing is both exciting and delicate10:20 PMs define customer value, corporate defines product value11:43 The effort put into developing the product should reflect in its pricing14:36 Getting a hold of the product value and where you’re going as a business17:01 Figure out the problem being solved and who is it for19:31 The product is marketed as a revenue enabler27:11 Pitfalls for new PMs is an overly narrow perspective of growing a product31:15 Spectrum of responsibilities a PM has33:32 3 things that affect pricing: needs of customer, value, and willingness to pay39:14 Advantages of using a cloud versus maintaining a hardware42:13 Sustainable business follow a cost-based model45:54 Business model is a bigger concept than just pricing46:50 Pricing a new product for enterprise customers50:58 Economic value estimation - what are the customers cost and value drivers52:11 Use real customers to product test53:00 Customers are willing to pay for the most painful problem58:29 Book recommendation from Soumeya59:50 Train your brain to understand how the market works01:02:11 Applying game theory in pricing 01:05:09 Think about the economics you’re driving with your product decisions