David Skok: Multi-Axis Pricing

Just found this great post by David Skok on the previous post’s topic of pricing power for early sales. He calls it multi-axis pricing. Must-read. I especially like his comments on “emotional willingness to pay”.

There is a very significant difference in the willingness to pay amongst various customer types. Car manufacturers have known this for a long time, and usually include a highly profitable model at the top of their range that appeals to the non-price conscious buyer, who likes to feel that they have bought the very best.  Take a look at the Mercedes Benz S-Class as an example: The base model S550 starts at $94k, but for those that aren’t price sensitive, they sell an S600 version for $160k, or an S65 AMG version for $211k.

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