Developing Pricing Strategies

Developing pricing strategies and programs:

As a new company and for the new product, if we want to make it succeed, we have to make differentia. What is that? Cost performance!

Cost performance means the good performance and the lower price. Especially for Chinese, most of them are in the middle classes and low salary class. They probably cannot afford expensive smart phone, such as iPhone, $649 ~ $849 for no contract and unlocked. We all know that the high price include brand value which can make huge profit. For new company, lower price is one of the succeed strategies. But the problem is which level of price should we set?

In order to obtain good word-of-mouth and establish brand, for the first new product, we can set the price base on material cost of one phone. We can make it same with cost of material. Consumer may compare with other same hardware configuration product and feel it is inexpensive. Take advantage of the psychological is the first step to attract attention from consumers. The second step, of course, is the good operating system or good performance. Android system is an open-source system. Like Samsung, they design and own a deeply customize operating system which base on Android of Google company. We also can provide the good android operating system. Do research and figure out what is personal need. Adding the open feedback system in the operating system, users can east send their expectation, suggestion and bug situation to our company. And then, we provide the update version which features are closely relate to habits of Chinese.

In the initial price position, we need survival. We keep the same price until the next generation launch. In that time, we only need keep providing good services, and then we still get profit over time because the cost of the material will decrease.

Determining demand:

Talk about Apple company, they earn a lot of money. Even the price of iPhone is so high, but it is still welcomed by tons of people. We all know the big brand and the good quality that iPhone has. The important is how Apple determining demand or how they marketing iPhone. Hunger marketing!

Because Chinese like cheaper and good quality things, there is a huge demand for smart phone in China. Restricting the output quantity of our smart phone, and creating smoke screen to show people demand exceed supply. It really makes people more interested in and more desirous.