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.

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