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The pivotal pricing question is where between the ceiling and the floor should a price be set?

In general, the answer depends on the company's strategy for the product.  If there is a compelling rationale for gaining share, and if the company is the low cost producer, then a price closer to the floor may be appropriate.  

If share gains are not strategically critical, or the company is cost disadvantaged, then pricing may be closer to the ceiling to maximize profit margins.

As a rule of thumb, a product that delivers a perceptible increase in benefits (say, greater than 20% increase in benefits), and is priced to split the value created 1/3 to the customer and 2/3's to the company, may provide the best of all worlds since:

(a) The product is well positioned against reference products

(b) The product's market value is enhanced

(c) Short-term profits (per unit) are increased

(d) The company has "wiggle room" to cut prices (and still stay above the price floor),     recognizing the ratchet effect (easier to reduce than increase prices) and the likelihood of competitive responses.