Price Bands

It isn't just different brands that sell at various prices; it's groups of products as well. You wouldn't expect a grand piano to sell in the same price bracket as a penny whistle. Study your own market sector. See if you can work out why prices are of the order they are. Then see if you can work out why your potential competitors have settled on different prices within the main grouping.

The breakdowns shown in Table 13-2 are typical. Actual prices tend to be of the $99.95 ilk, just below the perceived price break.

Table 13-2 Price Grouping Breakdown

RRP Band

Typical Products

$500,000+

Medium-large custom implementations, departmental-enterprise solutions

From $25,000 to $249,999

Custom-made accounts packages, serious application server, high-end enterprise databases, corporate AV solutions

From $10,000 to $24,999

Clustered O/S, high-end accounts, E-commerce Web server

From $2,500 to $9,999

Basic enterprise databases

From $1,000 to $2,499

Network O/S

From $600 to $999

Reporting software

From $300 to $599

Graphics packages, project, complete office solutions

From $100 to $299

Window O/S, RAD programming tools, word processor or spreadsheets purchased separately

From $50 to $99

Branded Linux O/S, basic account packages

From $0 to $49

Shareware, Freeware, utilities

Free

Linuxware, Star Office

These are indicative raw software costs. Consultancy costs can vary depending on the caliber of staff and the man-hours used as well as the true cost to compensate for pulling staff off other work.

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