You're a PM at a pharma company; your product helps cows produce 20% more milk, lasting a month. What pricing strategy and price would you set for the product?

My pricing strategy would be value-based, focusing on the incremental revenue generated for the farmer. The product's core value is a 20% increase in milk production over a month. To determine the price, I'd first calculate the average monthly milk revenue per cow. Then, I'd estimate the farmer's profit margin on that milk. The price would be set as a significant portion of the additional profit generated by the product, ensuring a clear and attractive ROI for the farmer. For example, if a cow produces $X in milk per month, and the product increases this by 20% ($0.2X), and the farmer's profit margin is Y%, the additional profit is $0.2X * Y%. I would price the product at Z% of this additional profit, ensuring the farmer still sees a substantial gain. This requires understanding the average milk yield, milk price, and farmer's cost structure in the target market.