Management Practice Insights
DOI: 10.59571/mpi.v4i2.12
Year: 2026, Volume: 4, Issue: 2, Pages: 147-153
Original Article
Sunny Arorai* & Janakiraman Moorthyi
iS.P. Jain Institute of Management & Research
*Corresponding author
Email: [email protected]
Received Date:06 July 2026, Accepted Date:28 September 2026, Published Date:15 October 2026
“Am I leaving money on the table when it comes to pricing my products and services?” This is a perennial question facing product managers and marketing professionals. Unpacking this puzzle, most managers are confronted with the inadequacy of prevailing practice: companies often price products based on the costs they incurred plus an added margin (aka costplus pricing). However, this method ignores the customer’s true willingness to pay (WTP) for the product. If the cost-plus price is less than the customer’s actual WTP, the company has not realised as much profit as it could have. An upgrade to costplus price stems from value pricing, which uses techniques such as conjoint analysis. These techniques are better, but they do not account for real-world situations, such as a customer comparing competing products or services. So, how to get even closer to customers’ true WTP? Recent by Research Sharlene He, Eric T. Anderson, and Derek D. Rucker introduces a new method – the Comparative Method of Valuation (CMV), which accounts for both the relevant comparables and the context of purchase.1 This essay offers guidance on when to use the new comparative technique and how to deploy it
1 Method of Valuation,” Journal of Marketing 88, no. 3 (2024): 50–68, https://doi.org/10.1177/00222429231195564. 2 Walter Baker, et al., Using Big Data to Make Better Pricing Decisions, McKinsey & Company, 1 June 2014, https://www.mckinsey.com/capabilities/growth-marketingand- sales/our-insights/using-big-data-to-make-better-pricingdecisions. 3 PwC, UK, The Power of Pricing: How to Make an Impact on the Bottom Line (PricewaterhouseCoopers LLP, 2013), https://www.pwc.com/ee/et/publications/pub/pricing_30965 6_v2.pdf. 4 Matt Woosnam, “2024 Paris Olympics Tickets: How Much They Cost, What’s Available, and How to Resell,” The New York Times, 26 July 2024, https://www.nytimes.com/athletic/5638683/2024/07/24/paris -2024-olympics-tickets-explainer/. 5 Julie Creswell and Danielle Kaye, “Have Potato Chips Reached Peak Price?,” Business, The New York Times, 11 July 2024, https://www.nytimes.com/2024/07/11/business/snack-foodprices- pepsico.html. 6 Liz Alderman, “Carrefour Drops PepsiCo Products in France Over High Prices - The New York Times,” The New York Times, 4 January 2024, https://www.nytimes.com/2024/01/04/business/francecarrefour- pepsi-prices.html. Sharlene He et al., “Measuring Willingness to Pay: A Comparative7 Daniel Kahneman et al., “Stated Willingness to Pay for Public Goods: A Psychological Perspective,” Psychological Science 4, no. 5 (1993): 310–15, https://doi.org/10.1111/j.1467-9280.1993.tb00570.x. 8 Pranav Kashyap, Six Common Mistakes In Pricing For Product- Led Growth, 8 August 2024, https://www.forbes.com/councils/forbestechcouncil/2024/08/ 08/six-common-mistakes-in-pricing-for-product-led-growth/. 9 Hulu, “ESPN on Hulu,” Hulu Help Center, https://help.hulu.com/article/hulu-espn-addon. 10 Gladys Rama, “AWS Slashes EC2 Instance Prices Up to 21 Percent -,” AWSInsider, 5 March 2017, https://awsinsider.net/articles/2017/05/03/aws-ec2-instanceprice- cut.aspx. 11 Vidhi Agarwal, “The Enterprise SaaS Pricing Blind Spot: Why Willingness To Pay Is So Hard To Get Right,” Forbes, 30 June 2025, https://www.forbes.com/councils/forbesbusinessdevelopmentc ouncil/2025/06/30/the-enterprise-saas-pricing-blind-spotwhy- willingness-to-pay-is-so-hard-to-get-right/.
© 2026 Published by SPJIMR. This is an open-access article under the CC BY license (https://creativecommons.org/licenses/by/4.0/)
Subscribe now for latest articles and news.
