Musings of a Mumbai bloke

The Lowest Price isn't Always Best, writes Jim Ostroff in an article advsing marketing and sales managers in a recent article on Kiplinger forecasts.com.

he says that Companies should price new goods based on their value to buyers, not according to handy formulas such as the cost of production plus a fixed markup. The sticker price should reflect the added value that buyers feel the product provides in helping them do something better, faster or cheaper or that offers a unique style or look.

i guess this explains why some times new products introduced in the market carry such a ridiculous high price. i belive one strategy to sell the latest “super duper NASA technology idgy midgy gadet or home appliance is to simply put an exorbitnat high priced for the first few weeks/ months. this just helps to “test the waters” . Then they monitor the sales data (no matter what the price, there is always someone who will buy the product) then later with some data mining and other staistical juglery i belive this big corporations decide the right price to market the product.

so next time you see a NEW NEW design of scotch tape $5 ,,, you know whats going on!!