
How a Game Taught Me to Correctly Price a Product - _kush
https://medium.com/@kush.ag/how-a-game-taught-me-to-correctly-price-a-product-8590b5929da1
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jackfraser
Interesting. Ultimately, the traditional forms of price discovery inherent in
a market are a function of supply and demand; they don't really carry over
into the digital world where supply is effectively infinite and demand is
elastic.

Rather, what we face is a change from commodities (wheat, fish, etc) to
distinct products within a category. When I go searching for an app for a
purpose, I have to choose:

* Do I want the app that costs $10, which seems expensive for a phone app, but also seems like it's likely to be of the highest quality by virtue of the price?

* Do I want the app that's priced at $2.99, which is more than 99 cents but still not $10? It might be better than the 99 cent app, or it might be a 99 cent app that the creator got wise about and charges more for now...

* Do I want the 99 cent app, knowing it's the least someone can charge? Does this imply a lack of quality? It feels a little bit better than the next category...

* How about the free app with ads and in-app purchases? I see that and worry that the app will annoy me and not be useful.

* How about the entirely free app?

I find myself experimenting with the latter, most of the time. One technique
that works really well on me is to have two separate apps, one free with no
ads/in-app purchases but limited in functionality with multiple indications of
what I could do in the paid app, and then a paid app for $5 or so. If I like
the basic version and the quality seems right, upgrading is an easy decision.

Perhaps app stores could incorporate feedback functionality so someone can
press a button indicating how they feel about value for money - "I'd buy this
but it's too expensive", or a "Wow, what a deal" button.

