Register now or log in to join your professional community.
It totally depends of marketing strategy, business plan, market share. Simply saying the price should be set as maximal competitive level to provide business plan achievement and the operational cost should be set as minimal but sufficient to provide business plan budget.
If your pricing benchmark on various data points like a) Products perceived MRP b) Competition MRP c) Sales of similar quality product from your product range of past d) sourcing cost of yours vs competition. If these are your basic benchmarks then you can plan well to yield more profits from the same/similar product in the market. 2 ways you can play it but both has a flip side hence taking a better, safer route is suggested
1.) High margin products which are sourced at low cost - These will be your winners
2.) Low margin and at high sourcing cost - these may be volume drivers but gives profits
This is what I feel is the whole game of price vs sourcing efficiency falls in place
Pricing should be component specific. Items which are not mass produced and have unique proprietary advantage should have higher contribution. While components which have common design should have low contribution.
Totally agree with Mr.Mikhail.
yes agree with Mr. Mikhail Vaskijev
