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When choosing the best pricing strategy for a fad product, several factors should be considered. First, the product's life cycle: fad products typically have a short life cycle, so pricing should be optimized for quick sales. Second, the target market's price sensitivity: if the target market is highly price sensitive, a lower price may drive higher volume sales. Third, competition: if there are similar products in the market, competitive pricing may be necessary. Fourth, cost: the price should cover the cost of production and provide a profit margin. Lastly, the brand's positioning: if the brand is positioned as high-end, a higher price may be justified.
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Need to improve your product pricing to maximize your profit margin? This Pricing Strategies Toolbox includes some of the most useful and common prici...
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To makes things more interesting, let's assume the product to be priced is a fad product. The editable graph on this slide depicts three strategies across units sold and time passed. Execs can use this strategy comparison to analyze revenue generation over time across each strategy, and then pick the best one with the highest overall number of units sold. This is helpful for execs to visualize how to price fad-products.
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