First, you should focus on those who will ultimately be paying: potential customers. Market research offers the right tools for this. In market research, you analyze your audience and focus on this group’s characteristics. Relevant information to describe your target group is not limited to gender, age, and civil status – it can also include income, profession, and education level as well as interests and wishes. With these characteristics, you can estimate how much money the potential buyers have for your product, and how much they are willing to pay.
This analysis is usually followed by a survey. Questions for potential buyers about the new product may include, “Are you interested in the product? If so/not, why?” In addition, the survey names a possible price and asks the participants if they consider it reasonable. In this case, the respondents’ reasons are of particular interest. Using the information you’ve acquired, you can then establish a suitable price range for your product or service. The comprehensiveness of your survey depends on the resources you have at your disposal. Many entrepreneurs and SMEs, for example, don’t have the resources to conduct a large-scale study. However, you can still collect useful information even with only 10 to 20 well-selected participants.