Premium Margins Bribe the Channel Across the Chasm

“reinforcing your claims to market leadership (or at least not undercutting them), and build a disproportionately high reward for the channel into the price margin, a reward that will be phased out as the product becomes truly established in the mainstream, and competition for the right to distribute it increases.”

“the only acceptable message is one of market leadership, your price needs to convey that, which makes it a function of the pricing of comparable products in your identified competitive set. 4.   Finally, you must remember that margins are the channel’s reward. Since crossing the chasm puts extra pressure on the channel, and since you are often trying to leverage the equity the channel has in its existing relationships with pragmatist customers, you should pay a premium margin to the channel during the chasm period.”