By Alex on Feb 24, 2011 in Buying behaviour, Price, Product life cycle | 1 Comment
Producers of mobile phones, digital cameras, flat screens and similar hi-tech products often have to pump huge budgets into R&D. To get this investment back – and break even as quickly as possible – they tend to “price skim”. This involves using high prices to remove the “cream” from the market before the competitors catch [...]
By Alex on Aug 17, 2007 in Price | 0 Comments
Some companies deliberately sell the same product for a much lower price, even though there is a real danger customers will find out. Why? * To recruit customers to the brand (Boss selling ‘seconds’ in factory outlets can attract people who may trade up next time to higher price products) * To clear out stocks [...]
By Alex on Aug 17, 2007 in Branding, Nicely done, Price | 0 Comments
When your pricing strategy is like Aldi’s – low price, always low price, but good reliable quality – you’ll be pigeon-holed as a “discounter”. There’s nothing wrong with this strategy, as long as you sell products in high volumes. Which is precisely what Aldi does – it’s the No1 in Germany apparently (though it would [...]