QUESTIONS

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a) Projected market size.
b) Your customers’ ability to pay.
c) Ideal customers’ feedback on purchase models, e.g. licensing, SaaS, sale.
d) Customer acquisition costs.
e) The need to always be below the market to ensure competitiveness.

The concepts underlying correct and incorrect answers:

a) Projected market size: Projected market size is an important factor to consider when setting the final price of your solution. It helps determine the revenue potential of your business and the pricing strategy you should adopt based on the size of your target market.

b) Your customers’ ability to pay: Understanding your customers' ability to pay is crucial in setting the right price. If your target customers cannot afford your solution at a particular price point, you risk pricing yourself out of the market. Pricing should align with the perceived value of your product to your customers.

c) Ideal customers’ feedback on purchase models, e.g. licensing, SaaS, sale: Feedback from your ideal customers regarding purchase models (e.g., licensing, Software as a Service, one-time sale) can influence your pricing strategy. Different customers may have different preferences for how they want to pay for your solution, and aligning your pricing model with customer preferences can enhance market acceptance.

d) Customer acquisition costs: Customer acquisition costs (CAC) are an essential consideration when setting prices. You need to ensure that the price you set covers the costs associated with acquiring and retaining customers. Pricing too low may lead to unprofitable customer acquisition.

e) The need to always be below the market to ensure competitiveness: This statement is incorrect. While it's important to be competitive, setting a price solely based on being below the market is not a sound pricing strategy. Pricing should be determined by factors such as your costs, value delivered, and your unique selling proposition (USP) relative to competitors. Being too focused on undercutting the market can lead to profit margin issues and may not always be sustainable.

QUESTIONS

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