Price isn’t (shouldn’t be) related to cost.
Price is a reflection of value. We can price where the customer is willing to purchase.
The optimal price is an optimisation function against the elasticity curve which expresses profit-per-unit vs units moved at a specific price point.
A price that’s higher than the competition implies quality.
A price that’s lower than the competition implies you’re paying less AND getting less.
A strong brand can command a higher price. And if it doesn’t, that can confuse the customer. But a high price can build a strong brand!
Price is part of the story we tell ourselves about a product, and it’s a key part of the marketing mix.
Price is also where we harvest all the value we’ve tried to put into our brand, and if we don’t harvest it, well then it just wastes away.
Be careful with price. Don’t price for volume, price for profitability.