Largely depends on the product itself. As already mentioned, art and antiques are different from technology. But the author certainly has a point here. That's why luxury brands can ask much higher prizes compared to non-luxury brands that don't have anything to do with production cost.
But one way of looking at prices was somehow missed that is really important in the production industry, at least from my point of view. Profit is prize minus cost. This goes somewhat in the direction of the targeting a market and engineering the product accordingly. But by regarding the actual selling prize of a product as given instead of the actual production cost changes a lot. And your not done by just engineering a product to a certain prize, if the market changes you have to improve your cost base.
And the more your product is a commodity, the more important this part of prizing gets as it is harder to boost prizes in this case. Something a lot of companies have a hard time to understand, at least that's my experience.
But one way of looking at prices was somehow missed that is really important in the production industry, at least from my point of view. Profit is prize minus cost. This goes somewhat in the direction of the targeting a market and engineering the product accordingly. But by regarding the actual selling prize of a product as given instead of the actual production cost changes a lot. And your not done by just engineering a product to a certain prize, if the market changes you have to improve your cost base.
And the more your product is a commodity, the more important this part of prizing gets as it is harder to boost prizes in this case. Something a lot of companies have a hard time to understand, at least that's my experience.