The document provides guidance on how to price products and services. It argues that the common question of "how do I price this?" is the wrong question to ask. Through a series of exercises analyzing different pricing scenarios, it shows that pricing is not about costs and profits, but about delivering innovation, perfection, and uniqueness. The conclusion is that freedom from pricing concerns comes from innovation and creating intellectual property, not from competition or sales volumes. Entrepreneurs should focus on how to make their offering unique rather than on costs when determining price.

1. Yoda, how do
I price what
I sell?

2. How to Price what you Sell?
Alok Rodinhood Kejriwal
Founder – 2win group &
therodinhoods

3. Why?
Why this PPT?
I‟ve sold crazy s*** in the past 29 years. From
infant socks to oil drums to LC (letter of credit)
discounts to advergames to virtual cars in
mobile games. In the process, I‟ve always been
confronted with the question “How do I price
this?!”
I‟ve also come across zillions of newly minted
entrepreneurs struggling with this tough
question.

4. Wrong is the
Question you
Ask…

5. The wrong question!
After deep reflection, I have realized that the
Question itself is WRONG.
Yup. Pricing doesn‟t matter. It‟s a „side
effect‟, an „occurrence‟, a „consequence‟.
In the next few slides, I shall explain why…

6. Exercise 1
Carefully study the next chart and THINK of
products and services (not related) that fit in
the (?) Boxes

7. Innovative
?
?
High $$$
Low $
?
?
Ordinary

8. Need a nudge?
If you didn‟t understand the chart, try this:
- The Top Right Box (green) represents something
that is High in $$$ (price) and Innovative
- The Bottom Right Box (blue) represents something
that is High in $$$ (price) and Ordinary
- The Top Left Box (pink) represents something that
is Low in $ (price) and Innovative
- The Bottom Left Box (purple) represents something
that is Low in $ and Ordinary

9. Now think of products and services that fit
the chart.
Once done, go the next slide where I reveal
my choices.

10. Innovative
Post-it
Notes
(3M)
iPhone
Low $
High $$$
Nothing
Everything
Ordinary

11. Exercise 2
Volume vs. Price

12. High Volume
?
?
Low $
High $$$
?
?
Low Volume

13. High Volume
Lays
Chips
Rare or
Nothing
Low $
High $$$
Anything
RollsRoyce
Low Volume

14. Exercise 3
Losses, Profits & Volume

15. High Volume
?
?
Profits
Losses
?
?
Low Volume

16. High Volume
e-Com
Companies
Coke
Profits
Losses
Services
firms
Failed
Startups
Low Volume

17. Exercise 4
Impulsive vs. Informed Buys

18. High Volume
?
?
Informed
Impulsive
?
?
Low Volume

19. High Volume
Grocery
iTunes
Informed
Impulsive
Luxury
Goods
Airport
Shopping
Low Volume

20. Exercise 5
Volume vs. Competitors

21. High Volume
?
?
Low
competition
High
Competition
?
?
Low Volume

22. High Volume
Google
Search
Mobile
Apps
Low
competition
High
Competition
Pet
Shops
Bridal
Services
Low Volume

23. Relief!
No more charts 
(feel free to create your own exercises using
more parameters)

24. Question
What did you learn?

25. Analysis
Let‟s examine the charts once again,
grouped together:

26. Free to Unaffordable
with Zero/Little Competition
Free
Low Price
High Price
Unaffordable
Google
Post-it notes
iPhone
Rolls-Royce
No /Little
Competition
No /Little
Competition
No /Little
Competition
No /Little
Competition

27. Irrational to High Price
with Massive Competition
Irrational
(Free) Price
Low Price
Medium
Price
Flipkart
Grocery
Services: Firms
like ad
agencies/Hiring
firms
Lots of
Competition
Lots of
Competition
Lots of
Competition
High
Luxury Goods
(Watches)
Lots of
Competition

28. Now ask yourself, which of these
Companies would YOU rather be?

29. Conclusion 1:
Pricing doesn‟t matter  when
You sell
INNOVATION
You sell
PERFECTION
You sell
LEADERSHIP
Google or
Apple
Rolls-Royce
Post-it
Notes/Amazon
AWS
Pricing
DOESN’T
matter
Pricing
DOESN’T
matter
Pricing
DOESN’T
matter

30. Conclusion 2:
Pricing does matter  when:
You sell what
OTHERS sell
You sell only
to COMPETE
You sell ONLY
for VOLUME
Services
businesses
Taxi services
Grocery type
stuff
Pricing DOES
matter
Pricing DOES
matter
Pricing DOES
matter

31. Meta Conclusion:
Stay on the left. Price IS immaterial.
High Price, High Volume
Bose
iPhone
Low
Competition
High
Bridal
Services
General
Services
Low Price, Low Volume
High Price, Low Volume
RollsRoyce
Cartier
Luxury
Goods
Zero Price, High Volume
FB
Google
Competition
Low
Coke
Lays
iTunes
Post-its
High
Duty Free
Low Price, High Volume
Mobile
Apps
Competition
Low
North Korea
High
Super famous
paintings
High Price, Zero Volume

32. What’s with the guys on the left
who DON’T care about Price?!
Google
Apple
Rolls-Royce
Cartier
• Unbeatable
technology
• Patents, IP
• Perfection of product
• Brand recognition
(built over years)

33. What’s with the guys on the right
who only care about price?
• Me-too, competing on price
• Marketing via personal
contacts
• Very people-dependent
• Competing for small
volumes
• No guarantee of
sustainability or profits
Services Firms (ad
agencies,
recruitment
services, etc.)
Niche service
providers
(e.g. Bridal
services)

34. Conclusion:
• FREEDOM from pricing comes from Innovation,
Perfection, Technology and Creating IP; NOT from clever
Costing, cut throat Competition or gushing Volumes.
• Service firms (e.g. Infosys, TCS, Wipro) have built
Pricing POWER by mimicking great product companies.
• Pricing is NOT about Cost + Profits.
It’s about Delight + Uniqueness.

35. How to Price?
Don’t think of cost &
margins. Instead think of
HOW you will be unique
in your offering
Constantly create IP. That
will make you develop
PRICING POWER
Introduce INNOVATION,
IRRESPECTIVE of
whether you price it or
not!!
Keep delivering
PERFECTION no matter
how ordinary your sale.
Perfection is a long term
price ruler

36. Disclosures:
• The principles and guidelines spoken about in this
presentation are strictly my own ideas and MAY NOT be
feasible/practical for you.
• This document should serve as a guideline and
reference - not as a rule book!

37. Liked this presentation?
Go through some more!
• Basic Funding Concepts for Entrepreneurs
• How to write effective e-mail proposals
• How to make an engaging PPT
• PR for Startups – a reference guide!

38. Connect with me!
e-mail - alok@rodinhood.com
Facebook facebook.com/rodinhood
Twitter - @rodinhood
My social network for anyone
enterprising!
therodinhoods.com
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www.slideshare.net/rodinhood