How Does A Firm?s Pricing Poli :: essays research papers

How does a loyals pricing policy relate to the products life daily round?When a company launches a sassy product, it knows the product wont stand firm forever. However, the company does expect to earn a satisfactory dinero to cover all the effort and risk that went into launching it. A firm can never accurately predict the lifetime of a product, simply the lifetime involves four distinct stages. These four stages atomic add together 18 collectively know as the Product Life Cycle (PLC).The first stage is the excogitation stage, when the product is first launched. Sales growth tend to be embarrassed as consumers are introduced to the existence of the product. At this stage therefore, profits are negative or low because of the low sales and high dispersal and promotion expenses. Much money is needed to attract distributors and build their inventories. forward motion spending is especially high to inform customers of the new product and corroborate them to try it. One of th e biggest launches in recent history is that of the DVD player. not only is this a new product, its a whole new market. Industry executives draw named DVD-Video the "Medium of the Millennium" and boast that DVD-Video is the fastest growth new packaged media order launch in history with soused to 5.4 million DVD-Video players shipped to retail since the format launched nationally in the U.S. in drop 1997 (Consumer Electronics Association).The outlook for next year is equally promising. The DVD Entertainment assembly estimates that hardware shipments will double to eight million DVD-Video players in 2000. And, establish on the success of the format exceeding all previous forecasts that number could be even higher. The group also estimates that the installed base will more than than exceed 10 percent of US households, a benchmark of success for a consumer electronics product.The surge in hardware sales is a arbitrary boost for retailers. In 1999, DVD-Video hardware rep resented more than $1 zillion in retail sales. This includes stand-alone players only and does not include DVD-ROM drives or other home theater products.There are now closely 70 DVD Video player models marketed under 30 divergent consumer electronics brands. In only its third year in the marketplace, DVD-Video player prices have declined significantly. According to Intelect ASW, the average price sold for a DVD-Video player was $298 in November, down 30 percent from $428 at the same time last year. Some players and models are available for less than $200 making the format accessible to the mass market.