Schwinn's Pricing Strategy: A Case Study

Schwinn’s pricing strategy encourages great opportunity to target specific niche markets and align pricing with competition to increase industry market share. Although the brand’s biggest challenge is its traditional image, Schwinn’s pricing can be considered affordable for college students. In regards to pricing perception, market research can be conducted to determine if this particular market will associate low prices with product quality and if they are willing to pay higher prices. Along with younger cyclists, retirees that are less price-sensitive will purchase the product based on familiarity and brand loyalty. Given that “The Cruiser” appeals to these specific markets, Schwinn has the ability to ensure that various models mirror this pricing structure in order to maintain a competitive advantage. In addition to that, taking into account demographic factors such as the location and economic strength of potential buyers will be beneficial in providing more visibility of potential sales. …show more content…
When evaluating different factors that contribute to overall costs, it is easy to identify the key areas that will help structure the price changes at each level. The low cost spectrum of the bike brand maintains a reasonable advantage when factoring in psychological costs. Individuals such as beginner mountain bike riders, senior citizens, and perhaps a handful of college students may not initially consider the trendier and more expensive options. Along with this group, parents that are loyal to the brand may find comfort in purchasing the low cost kids’ bikes for their children. This potential set of buyers may prefer to simplify the purchasing process. By avoiding the need to assess the pros and cons of more expensive and technical products, the low cost option alleviates the stress as well as risks that are correlated with major