New Product Pricing Strategy

This chapter presents the development and application of a model for effective decision making in establishing strategies for the pricing of new products. The model developed evaluates all important criteria that need to be considered for the successful implementation of new products in the market. The formulation of the model was tailored for a specific new software product with unique marketing considerations in a well-defined, segmented market. The process used can easily be extended to include other products, provided that model changes and other appropriate parameters realistically describe the problem being analyzed. Such information needs to be established on a case by case basis by the user, for proper validation of the model.