Ramanujam Flashcards
What is the significance of ‘pricing power’ in product innovation?
Pricing power is the ability of a company to set prices without losing customers, indicating strong customer demand and perceived value.
What is the main premise of Chapter 1 in “Monetizing Innovation”?
The main premise is that successful companies design their products around the price to ensure profitability and market success.
Why do Ramanujam and Tacke emphasize the importance of pricing in product development?
They emphasize that pricing is a critical factor in determining a product’s market success and profitability from the outset.
According to Chapter 1, what role should pricing play in the innovation process?
Pricing should be a fundamental component that influences product design and development decisions from the beginning.
What common mistake do companies make according to Ramanujam and Tacke regarding product development and pricing?
Companies often treat pricing as an afterthought, finalizing it only after the product development is complete.
How do the authors define ‘Monetizing Innovation’?
‘Monetizing Innovation’ involves integrating pricing strategies into the product development process to create products that customers are willing to pay for.
How do Ramanujam and Tacke suggest companies should validate their pricing strategies?
Companies should validate their pricing strategies through market research, customer feedback, and testing different price points.
What is cost-plus?
cost-plus pricing, which adds a standard markup to the cost of production
What is the ‘build it and they will come’ fallacy discussed in Chapter 1?
This fallacy refers to the mistaken belief that simply creating a good product will automatically attract customers, without considering pricing and market demand.
Why do the authors argue against the ‘cost-plus’ pricing method?
They argue that cost-plus pricing, which adds a standard markup to the cost of production, often ignores customer value perceptions and market conditions.
What is the ‘Willingness to Pay’ (WTP) concept introduced in Chapter 1?
WTP is the maximum amount a customer is willing to pay for a product, which should guide the product development and pricing strategy.
How can understanding customer segments impact pricing and product development?
By understanding different customer segments, companies can tailor their products and pricing strategies to meet the specific needs and price sensitivities of each segment.
What is the ‘Price-Value Map’ mentioned in Chapter 1?
The Price-Value Map is a tool that helps companies align their product offerings with customer perceptions of value and willingness to pay.
What is ‘value-based pricing’ as described in Chapter 1?
Value-based pricing sets prices based on the perceived value of the product to the customer, rather than on production costs or competitor prices.
What role does customer feedback play in the pricing process, according to Chapter 1?
Customer feedback helps companies understand the value perceptions and willingness to pay, informing more effective pricing strategies.
