Product pricing analysis probes into the various pricing strategy adopted by a company to determine the asking price of a certain product. The analysis offers a comprehensive study of all the relevant factors influencing the fixing of market price of the product and thereby offers its inference on the price behavior of the concerned product.
Sample Product Pricing Analysis
Conducted by: Cornell Analysts Organization
Date of Submission: April 6, 2012
Product Name: Supertechnology Phones
Manufactured by: Smart Mobiles
Product Description: Supertechnology Phones are the latest offerings of Smart Mobiles. The handsets are empowered by the latest technologies and applications and are here to revolutionize the concept of mobile phones. The sets are extremely sleek and stylish and have almost everything in themselves. Designed mainly for the gen Y customers, these phones are suave, easy to use and can well be at par with palmtops in terms of their utility.
Pricing Policy: Since the phones were initially designed to cater to the young population, the pricing policy adopted was to limit the price band within a range that is within the affordability of students. However, with the increasing demand and popularity among the young professionals and entrepreneurs the company launched a whole new series designed exclusively to cater to their needs. The pricing of this series was therefore fixed slightly on the higher range in accordance with the affordability of the professionals.
The following figures are important in this respect-
Technological expertise cost – 10-12$
Production Cost – 15-20$
Shipment cost – 8-10$
Selling Price – 45-50$ (Profit Margin – 8-12$)
Price Behavior: When launched, the product demanded a price of 56$. However with the increase in demand, the price fell to 43$. Last year again saw the introduction of a new series that attracts a price of 73$ in the market today.
Price Comparison: Utility Mobiles and Cool Mobiles are identified as the company’s biggest threat in the market. Hence the pricing of the handsets are fixed as per the pricing of its competitors.
Company Name Price
Smart Mobiles 45-50$
Utility Mobiles 38-76$
Cool Mobiles 46-68$