Pricing Splunk’s New Service

Q: Pricing Splunk’s New Service

This question evaluates a product manager's competency in pricing strategy, covering customer segmentation, value-based versus cost-plus approaches, competitive benchmarking, packaging tiers, and experimentation for enterprise B2B observability and security analytics products.

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Question

Pricing a New B2B Service for a Mid-Size Tech Customer

Context

You are a Product Manager evaluating how to price a new service in the observability/security analytics space for a mid-size tech company where you previously interned. The goal is to outline a rigorous pricing approach a PM would use for an enterprise/B2B product.

Prompt

How would you determine the price? Discuss the following:

Customer segmentation (who, why, and how to segment).
Value-based versus cost-plus approaches (trade-offs and when to use each).
Competitive landscape (how to benchmark and differentiate).
Packaging tiers (good/better/best, value metrics, and add-ons).
Experiments and research you would run to validate and iterate on pricing.

Pricing Splunk’s New Service

Pricing a New B2B Service for a Mid-Size Tech Customer

Context

Prompt

Solution

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