Pricing: your product doesn't have to be a commodity

I hate commodity products because I like premium pricing. But how can you charge a premium?

Generic cables are commodities--yet audio and video cables from Monster fetch a premium price. Why? They're made with better wires and they come with a lifetime warranty. They have a terrible website. Just try to find information about the quality of their products and their warranties. Yet musicians who care about sound opt for the better product. More at

Flour is a commodity--yet my father prefers to bake bread with Robin Hood flour, available only in Canada. It makes the best bread! The last time I drove to Toronto, he asked me to buy him some. I said, "You want me to smuggle 10 kilos of white powder across the border!!"

Gad, but their website!

Hood's baking professionals responded by providing high-quality convenience foods. During this time of intense economic competition, Robin Hood renewed its focus on quality, service and building trusted partnerships with customers and suppliers.

If you have a me-too product, you'll have to offer me-too pricing. But why not charge a premium? What do you do that is special in your competitive marketplace? And who values that special thing?

Instead of building a product that is just the same as everyone else's, build one with capabilities or attributes that matter to a market segment. And charge 'em a premium.

Steve Johnson

Steve Johnson

Steve Johnson was a founding instructor at Pragmatic Institute, a role he held for more than 15 years before he left to start Under10 Playbook. In his return to Pragmatic Institute, Steve supports the complete learning path for product teams, ensuring they are fully armed for success. 

Over the course of his career, Steve has helped thousands of companies and tens of thousands of product professionals implement product management processes. He has worked in the high-tech arena since 1981, rising through the ranks from product manager to chief marketing officer. Steve has experience in technical, sales and marketing management positions at companies that specialize in both hardware and software. In addition, he is an author, speaker and advisor on product strategy and product management.

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