The Price of Experience vs. Straight Product Pricing

Business school will tell you quite a few things about costs and pricing. Almost everything you tend to learn in business school is based on some sort of manufacturing idea of a product that only accounts for things such as labor, cost of goods sold, and what you need to charge for the product to be profitable. Of course there is much more to it, but most business owners rarely get that far because they have skipped the entire added benefit of seriosus marketing study.

A sort of manifesto about who you sell t rather than what you sell called Price Isn't Tied to Your Product discusses this very thing. It describes the idea that you aren't selling just products anymore like you could 50 years ago. There are jsut way to many variations of the same kind of products.

Shoes, baby bedding, and most notably coffee, which he uses as an example to describe how paying a lot more for a cup of coffee at Starbucks has nothing to do with how good it is. It's the experience and the people who are willing to buy it.