The price of your product has a lot to do with how successful the product will be and how it will be perceived to your customers. The price has to be reasonable to consumers but also reasonable enough to make your company profits, if the product is priced to low then it can cut profits and also be perceived as a low quality product, however if the price is too high then many may consider to not be able to afford the product and therefore the company might lose consumers.
Fitbit has different devices that are priced according to the amount of things the devices can do besides just tracking steps. The devices consist of Zip, One, Flex, Charge, Charge HR, and Surge which is the highest priced article. When Fitbit was created there was a capital of 400,000 that was invested mostly by the founders of the company. However, it took a couple of years to finally get it to consumers. At the beginning Park and Eric had trouble getting supplier, and finding production lines, at times they were very close to call it quits.
Cost Analysis/Price Justification/Market Channel Plan
The cost for production for the Fitbit is at an average of $17.36 per device, even though the devices vary which also costs the price to vary a little as well that is the average cost of production. Since the Fitbit is assembled in Singapore and Bantam, …show more content…
They more than likely use status quo pricing which means they meet the competitions going rate pricing. Whereas other pricing strategies such as penetration and skimming involve setting a price low in the beginning and building up from there and skimming is setting a price too high for consumers to see if the product succeeds or fails. I believe Fitbit uses the status quo and stays mostly balanced with their pricing, constantly comparing prices with competition and trying to stay even in the line of price too low and price too
Fitbit has different devices that are priced according to the amount of things the devices can do besides just tracking steps. The devices consist of Zip, One, Flex, Charge, Charge HR, and Surge which is the highest priced article. When Fitbit was created there was a capital of 400,000 that was invested mostly by the founders of the company. However, it took a couple of years to finally get it to consumers. At the beginning Park and Eric had trouble getting supplier, and finding production lines, at times they were very close to call it quits.
Cost Analysis/Price Justification/Market Channel Plan
The cost for production for the Fitbit is at an average of $17.36 per device, even though the devices vary which also costs the price to vary a little as well that is the average cost of production. Since the Fitbit is assembled in Singapore and Bantam, …show more content…
They more than likely use status quo pricing which means they meet the competitions going rate pricing. Whereas other pricing strategies such as penetration and skimming involve setting a price low in the beginning and building up from there and skimming is setting a price too high for consumers to see if the product succeeds or fails. I believe Fitbit uses the status quo and stays mostly balanced with their pricing, constantly comparing prices with competition and trying to stay even in the line of price too low and price too