Mataracy
VIP Contributor
Pricing in the early stages,when the product first appears on the market,is quite different from that in the late stages, when the product is suffering from encroachment from new products and from shift in taste.
NEW PRODUCT PRICING
In marketing, a product is a new product if it has a set of equalities that distinguishes it from other product that have been offered before.
Therefore,an annual model change in an established product,change in packaging or in the image portrayed by the product or the seller of that product,may be interpreted as causing the product to became a new product.
Such new products,however, can be treated in the context of pricing in established product markets,since they are really products similar to those that have been offer before ,or are still being offered,except that they have now some additional product qualities that may put additional value on them. Hence if the new product is an improvement over the earlier model, a price premium may be demanded.
But if all competitors produce their new product at about the same time,such as the yearly model change in the auto industry (in the advanced countries), the decision maker must be sure that his competitors are likely to raise their prices, either in response to rising variable unit cost or as a result of agreement between price makers.
What did you understand by new product pricing according to age and life cycles?
NEW PRODUCT PRICING
In marketing, a product is a new product if it has a set of equalities that distinguishes it from other product that have been offered before.
Therefore,an annual model change in an established product,change in packaging or in the image portrayed by the product or the seller of that product,may be interpreted as causing the product to became a new product.
Such new products,however, can be treated in the context of pricing in established product markets,since they are really products similar to those that have been offer before ,or are still being offered,except that they have now some additional product qualities that may put additional value on them. Hence if the new product is an improvement over the earlier model, a price premium may be demanded.
But if all competitors produce their new product at about the same time,such as the yearly model change in the auto industry (in the advanced countries), the decision maker must be sure that his competitors are likely to raise their prices, either in response to rising variable unit cost or as a result of agreement between price makers.
What did you understand by new product pricing according to age and life cycles?
