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

How does a firms pricing form _or_ system of government relate to the products life cycle?When a lodge launches a new product, it knows the product wont last forever. However, the follow does expect to earn a satisfactory profit to cover tout ensemble the effort and risk that went into launching it. A firm can neer accurately predict the lifetime of a product, but the lifetime involves quatern distinct stages. These four stages be collectively known as the crossroad Life Cycle (PLC).The freshman stage is the introduction stage, when the product is first launched. Sales growth tend to be low as consumers atomic number 18 introduced to the existence of the product. At this stage therefore, profits are negative or low because of the low sales and high distribution and promotion expenses. more money is needed to attract distributors and build their inventories. Promotion spending is oddly high to inform customers of the new product and get them to try it. whizz of the bigge st launches in recent history is that of the videodisk player. Not all is this a new product, its a whole new market. Industry executives return named DVD-Video the "Medium of the Millennium" and boast that DVD-Video is the fastest growing new packaged media format launch in history with close to 5.4 million DVD-Video players shipped to sell since the format launched nationally in the U.S. in autumn 1997 (Consumer Electronics Association).The outlook for nigh year is equally promising. The DVD Entertainment Group estimates that hardware shipments go forth double to eight million DVD-Video players in 2000. And, based on the triumph of the format exceeding all previous forecasts that number could be nonetheless higher. The group also estimates that the installed base will more than exceed 10 percent of US households, a benchmark of success for a consumer electronics product.The soar upwards in hardware sales is a positive boost for retailers. In 1999, DVD-Video hardw are represented more than $1 billion in retail sales. This includes stand-alone players only and does not include DVD-ROM drives or other root word theater products.There are now nearly 70 DVD Video player models marketed under 30 different consumer electronics brands. In only its third year in the marketplace, DVD-Video player prices have declined significantly. According to Intelect ASW, the middling 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 host market.