Question

why do most bike companies struggle when it comes to price judgement? what are some ways a bike company can compare prices with other companies and raise thier sales so that a struggling conpany can be succesful.

Answer 1

Price judgement could be regarded as judgement one would take while setting the price of any product by the organisation apart from the cost. Many bike companies like Yamaha etc struggle because of their price judgements because there exists a lot number of companies offering the bikes all around the world. Any slight change in the price of the bike apart from the competitor one's would affect the deman strategically. Thus, a company offering bikes has to first analyse it's own unique selling features and the qualitative factors that its bike would service which would make it a premium ranging bike or a normal range one. Some ways a bike company can compare it prices with the competitors are:

1. Either to set the price lower to attrach more customer: The first factor would be set the price lower than what is being offered by the competitor's organisation. By doing this, a strategic cost based strategy could be utilised by your company where one tries to lower its cost so much that economies of scale could be achieved and the price could be set lower so that customers could be attracted and but your product to increase the sales volume.

2. Either to set price higher because of the quality served: Another way is to set the price higher than that of your competitor's product. This could be done to ensure that you are serving a premium class quality by your brand name and thus would charge higher because the costs are higher. That would make your product a luxuary and thus, sales would be increased by the people who buy because of choice and quality.

3. To set the price more or less same as the competitior's: Last method is to keep your price more and less same as your competitiors'. By doing this, no fights or risks could be faced. You are keeping a price which is same and it is totlaly on the customer who he/she percieves to be a better brand and it all depends upon the marketing and the advertisement your company does to promote.