It is usually assumed that marketers use scientific methods to determine the price of their products. Nothing could be further from the truth. In almost every case, the process of decision is one of guesswork.

Prices perform three functions in organizing economic activity: first, they transmit information; second, they provide an incentive to adopt those methods of production that are least costly and thereby use available resources for the most highly valued pur poses; third, they determine who gets how much of the product—the distribution of income. These three functions are closely in terrelated.

If you've settled on the value approach to investing and come up with an intrinsic value for a security or asset, the next important thing is to hold it firmly. That's because in the world of investing, being correct about something isn't at all synonymous with being proved correct right away.

the price system is a mechanism for coordinating knowledge; and

Generally speaking, changes in the prices of finished goods are "cost determined" while changes in the prices of raw materials inclusive of primary foodstuffs are "demand determined".

The tests which are the subject of this discussion were devised to disclose how much reliance could be replaced upon an Index of the Price Level for Industrial Common Stocks compiled from the point of view of investment values rather than of price changes.

Providing value in Product form is valuable because Products can be Duplicated . This book was only written once, but individual copies can be printed and delivered millions of times to readers all around the world. As a result, products tend to Scale better than other forms of value, since they can be Duplicated and/or Multiplied (all discussed later).

In order to understand how to make a compelling offer, you must understand value. The reason people buy anything is to get a deal. They believe what they are getting (VALUE) is worth more than what they are giving in exchange for it (PRICE). The moment the value they receive dips below what they are paying, they stop buying from you. This price to value discrepancy is what you need to avoid at all costs.

Value is not determined by those who set the price. Value is determined by those who choose to pay it.

Price is what you pay. Value is what you get.

Price is what you pay. Value is what you get.

The Ten Ways to Evaluate a Market provide a back-of-the-napkin method you can use to identify the attractiveness of any potential market. Rate each of the ten factors below on a scale of 0 to 10, where 0 is terrible and 10 fantastic. When in doubt, be conservative in your estimate: Urgency. How badly do people want or need this right now? (Renting an old movie is low urgency; seeing the first showing of a new movie on opening night is high urgency, since it only happens once.) Market Size. How many people are purchasing things like this? (The market for underwater basket-weaving courses is very small; the market for cancer cures is massive.) Pricing Potential. What is the highest price a typical purchaser would be willing to spend for a solution? (Lollipops sell for $0.05; aircraft carriers sell for billions.) Cost of Customer Acquisition. How easy is it to acquire a new customer? On average, how much will it cost to generate a sale, in both money and effort? (Restaurants built on high-traffic interstate highways spend little to bring in new customers. Government contractors can spend millions landing major procurement deals.) Cost of Value Delivery. How much will it cost to create and deliver the value offered, in both money and effort? (Delivering files via the internet is almost free; inventing a product and building a factory costs millions.) Uniqueness of Offer. How unique is your offer versus competing offerings in the market, and how easy is it for potential competitors to copy you? (There are many hair salons but very few companies that offer private space travel.) Speed to Market. How soon can you create something to sell? (You can offer to mow a neighbor’s lawn in minutes; opening a bank can take years.) Up-front Investment. How much will you have to invest before you’re ready to sell? (To be a housekeeper, all you need is a set of inexpensive cleaning products. To mine for gold, you need millions to purchase land and excavating equipment.) Upsell Potentia

Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan.

Economic Values that people typically consider when evaluating a potential purchase. They are: 1. Efficacy — How well does it work? 2. Speed — How quickly does it work? 3. Reliability — Can I depend on it to do what I want? 4. Ease of Use — How much effort does it require? 5. Flexibility — How many things does it do? 6. Status — How does this affect the way others perceive me? 7. Aesthetic Appeal — How attractive or otherwise aesthetically pleasing is it? 8. Emotion — How does it make me feel? 9. Cost — How much do I have to give up to get this?