As an MBA, may I suggest you not base your price on your costs, but on what your buyers are prepared to pay.
Why not poll the readers of your site and ask something like,
For a device with these features, would you be prepared to pay $200? $300? $100?
Afterall, at this point, no such device is available at any price.
Apple did not base its price of the new IPAD on what the parts cost to make.
Studies show Early adopters will pay a much higher price than others. As you satisfy their demand, you lower your price, just like was done with Iphones and other hot electronic products.
You're right, costs are not the only factor - but they have to be known, at the very least. We also have to estimate the demand curve which is very hard to do for a completely new product. Just asking people does not yield accurate results at all.
Banks with new financial instruments and high tech companies (nanotech, new materials, biotech) sometimes have the same problem and there are some interesting papers out there which we're trying to read and see if we can adapt them to fit our situation. It's not easy when we're working 14 hours a day just trying to keep the vendors in check and finishing the programming (and taking trips to factories and so forth).
Given the nature of your product and its unique aspects, determining future demand will be very difficult. (its not like you have come up with another new smart phone!) You certainly can ask those who follow your web page if they would be apt to buy a Dreamlover 2000 and how much they might be willing to pay for it.
They are all likely to be early adopters and less price sensitive anyway.
Another source of market data might come from the makers of CB-2000. The number of CB's sold might give a clue to the likely demand for DL2. And getting an annual sales figure over several years could help throw some light on what future sales might look like as you get the word out.
What is their total installed base? Unlikely that those who do not own or at least know about male chastity belts are potential buyers of your device at this point.
Perhaps among your followers is an experienced high tech marketing manager who could advise you on pricing strategy.
As a potential buyer, I am hoping you are successful in bringing DL2 to market soon.
By dreamloverlabs at 2010-06-22 21:22:41 Reply 