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Premium prices Thu, Oct 25, 2012
From a profile on the founder of Red Bull:
A Red Bull is about two bucks a can, you know, which is four or five times what you pay for a Coca Cola in a grocery store. And I asked him, I said, what gave you the brass to put a premium price on it out of the gate?

And he looked back at me all deadpan and he said, how would people know it was a premium product if it didn't have a premium price?
Reminds me of a profile on the founder of Grey Goose:
Here were all these vodkas, in the $15-to-$17 range, vying to be the premium brand (with Absolut mostly winning). Frank just sidestepped the fray altogether and charged an unheard-of $30 a bottle.
In conclusion, businesses base their prices not on manufacturing costs or some other measure of reality, but simply on what they can convince people to pay.


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