1. Software Pricing Cathy Brode Taken from Camels and Duckies http://www.joelonsoftware.com/articles/ CamelsandRubberDuckies.html

2. Software Pricing According to Joel www.joelonsoftware.com

3. Camels and Rubber Duckies Pricing is a deep, dark mystery. The biggest mistake software companies make is charging too little An even bigger mistake is charging too much “If you can't be bothered to read this, just charge $0.05 for your software, unless it does bug tracking, in which case charge $30,000,000 for it. “

4. Demand curve Joel’s first point is around building a demand curve If 250 people bought your software at $199, 200 at $250 and 325 would buy it at $149 and so on. This leads to a downward-sloping curve, because the more you charge, the fewer people will be willing to buy your software. The key point is that the curve is downward sloping

5. What about profit? Assume that each ‘unit’ has a profit of $35 (you can’t take development costs into this) This is where the camel comes in! Plot the profit against price and you get a graph with a hump (local maxima to use its proper term) From this method you can get the optimal price point. $220 in Joel’s example.

6. Rich and Poor customers Aka what is their budget. ‘Rich’ customers should buy at $349 ‘Poor’ customers at $220 Guess what… Profits go up

7. No thanks So if customers said no thanks lets give it away at $99 Let me quote Joel here –“Babymosesinabasket, I think we just made $62K in profit! “

8. Further segmentation “customers are happy because we're asking them to pay the amount they were willing to pay already “ Market programs as “Professional”, “Home” etc Profits keep increasing - WOW

9. Hmmm How many would think they had a fair price? Long term image of product. How about comparisons with competitors? Are they getting the Rolls Royce or the plastic Duck?

10. For discussion The more you learn about pricing, the less you seem to know. All material is taken from: http://www.joelonsoftware.com/articles/Ca melsandRubberDuckies.html http://www.joelonsoftware.com/articles/Ca melsandRubberDuckies.html