List and discuss the key factors that should be included when setting prices of innovative products.
- Market research:
This step is important to understand the demand in the market. The demand forecasted will be responsible for the production and breakeven of the company. Thus, this is one of the most important steps. It is important to find the demand and supply gap for your product.
- 2-5 key elements to pricing which are value, variable, visible/ invisible, virtual
- 4-Competing products:
- 6-Target market: Know your customers. When it comes to innovative products, the teenagers are the early adapters. Thus, your marketing strategies must be focus towards them.
- 7-Competitive advantage: It is important to show the target audience what advantages does your product has to offer.
- 8-Factors affecting international pricing which are internal ( firm-level factor, product factors) and external are ( market factors, environmental factors) explain each one and provide examples for each one
When a new product is developed, the pricing of the product is very important. The various factors to be considered for this are the production cost, operating expenses, rents, insurance and taxes. Thus, the price of the product should exceed these costs.
Competitive pricing is also important to survive in the market.
The company must decide initially how they want to position themselves in the market. This builds their overall image in the market for the years to come.