What sources should Charles use to decide the product’s pricing strategy?

An organization has one single product it has been working on for years. The product is making a profits; however, the Sale Manager advises Charles, the Product Owner, to reduce the price to attract more customers. The Financial Director argues that this may harm the company revenue.

What sources should Charles use to decide the product’s pricing strategy?
A . Lead time
B. Market share
C. Innovation rate
D. Competitor’s pricing

View Answer

Answer: B,D

Explanation:

As evidence of organizational agility, the Evidence-Based Management approach measures value and provides ways to measure and improve the ability to deliver value. This approach allows organizations to make rational, fact-based decisions, elevating conversations to empirical evidence, logic, and insight from preferences and views.

In this situation, the Product Owner is really trying to explore the unrealized value. (Value which could be realized if I did XYZ (reduced price, added a feature) in the future). Unrealized value can be increased by building more features which the clients need, increasing customer satisfaction and market share. The existing market share and competitors existing pricing will help the Product owner evaluate the unreleased value of the product and make informed decisions accordingly.

Desired user satisfaction gap / unmet customer needs and desired customer experience are all measures which help with determining Unrealized Value. Note: Unmet customer needs and desired customer experience are not wrong answers either. They are just not listed as options.

Competitor pricing is important here as well because the questions list that he is reducing the price to attract more customers and competitor pricing will surely help him understand the number better.