Alex Woodruff Biz Buzz

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 [...]

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 [...]

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 [...]