It was a tough time deciding the price of the product since this product is related to technology. When technology is new, they tend to be a bit expensive which is why we had to price the product in the most reasonable manner.
The breakup of our product is as follows:
- Production cost 59.15 pounds
- Transportation cost (included in the production cost) –
- Profit margin (65%) 109.85 pounds
- Total cost (per unit) 169 pounds
The price may seem to be expensive but it is worth the cost because the pair of shoes is loaded with several features that can actually be of great use while at work. Every basic detail of the product was explained in the previous blogs.
Our customers are a bit hesitant to pay 169 pounds for our product because it is slightly over priced as they think and our competitors are offering a similar technology at relatively low price that is 140 pounds and in this they only provide a sole which has the same technology that our product has, the only difference is that the bio-metrics technology in our product is customized in a shoe and our competitor provides the biometrics technology in a sole which can be inserted in any shoe of their choice and can be used. As these products are similar but not the same, there is a price variation. The customers are not really willing to pay such an amount for the bio metric shoe before they were given the demonstration about the shoe and its benefits over the competitive product. After analyzing all these points, the customers were slightly comfortable in paying such an amount because they realized that this is a good deal and it is a great value for money.
The message channels through which we would promote our product were magazines, pop-advertisements and newspapers. A product like this does not really need marketing since this is majorly targeted towards large scale companies. We had tested all three message channels while surveying.