Pricing Entry-Level and Multi-Featured
- Do not automatically think lower price is better
- Certainly lowering prices increases demand, but by doing so, you lose profitability, and thus force other companies to lower their price as well. This triggers a price war.
- No one wins a price war
- I have seen many industries where all companies attempt to lower their price, to the point that no one makes money.
- When this happens, the correction to this problem means the entire industry must raise their price, and unless the professor enforces that, it’s not going to happen.
- Or create a niche
- If you are in a price war, not every company is going to have the same strategy, and therefore you to figure out a compelling strategy for your cameras by creating a niche. Experiment with camera builds, prices, promotions, and compare net profits when you match assembly.