A leading fashion brand sold a cosmetic at three price points – $18.99, $15.99 and $12.99. It found that sales were maximised at $18.99 – and continued to sell the product at the premium price. Among other things, this finding suggests that the lowest price is often not the best price – even in terms […]

A leading fashion brand sold a cosmetic at three price points – $18.99, $15.99 and $12.99. It found that sales were maximised at $18.99 – and continued to sell the product at the premium price. Among other things, this finding suggests that the lowest price is often not the best price – even in terms of sales volume. Depending on the month, Apple sells between 10 and 40% of the world’s smartphones. When speaking at conferences, I find that around 60% of the audience has an iPhone. Few, if any, know the differences between their iPhone and directly competitive products – many of which are cheaper. Many iPhone purchasers pay a premium of up to $200 without knowing the advantages, if any, over other smartphones. I am one of them. Further, Apple has traditionally had a three-product pricing strategy – high, medium, and low. The medium product has consistently sold the best.…