In the last post, I introduced the Consumer Pricing Expectations Range (CPER).

People have an expectation of how much your kind of product should cost. Whether a netbook or 50-inch LCD, your best chance at success is to price within the CEPR.

If your pricing is above the range, these are the immediate issues:

• People have other, more affordable alternatives, and will buy those.
• Your sales will lag.
• You’ll have problems with retailers, who will wonder why your price is high.
• You may be perceived as out-of-touch.
• You’ll create a reputation of a company that charges too much. Think Sony.

It’s possible to shift the CPER upwards, but you need excellent marketing AND evangelist consumers to do so. Most companies have neither. One company has both. Apple.

If your pricing is below consumer expectations, you’ll have to deal with these problems:

• People will assume your products has less value (features, functions, etc.) than other products priced within the CPER.
• Retailers will wonder why your product costs are so low.
• Ironically, you probably won’t sell as much as the higher-priced competing items.
• Examples: Sandisk put out an affordable MP3 player called the Sansa. It runs as low as $40. But it has yet to crack through to mainstream consumers, many of whom believe there is only one brand of digital music player. On the other hand, Pure Digital created the Flip digital camcorder, and priced it below $100. It was a huge success because the company had excellent marketing. Its consumer education, focused on simplicity, was extremely effective in communicating how the Flip will improve people’s lives.

So aim at the sweet-spot, within consumers’ pricing expectations range. It’s challenging enough to sell consumer electronics without creating additional obstacles for yourself. In our industry, there isn’t much you have control over. But you have complete control over pricing.