I thought the normal way was to start with a unique offering and maintain good margins over production costs to recoup R&D costs quickly.
Over time prices normally fall, once a product has been designed and tooling made the actual "gate" price is pretty low, the "copiers" still have to do a bit of testing and get tooling so have some "R&D" and tooling costs.
Most manufacturers reduce costs, bring more customers to the market and therefore can survive with more sales at lower margins. Nobody ever has an exclusive product forever.
If Panasonic decided to keep the cost of Plasma TV's at £5k because they were first to market them where would they be now? - It is an easy one - Bankrupt.
You cannot charge 2,3 or 4 times as much for an almost identical product than your competitors and expect people to buy your product, if you reckon it is better designed etc. and with good reputation, brand awareness etc. at best I would expect a 20% premium.
The exception to this rule seems to be in the world of fashion where people will buy a T-Shirt that cost £2 to produce for £45 because of the name on the label - unfortunately for you these people do not buy too many mudslings.
Over time prices normally fall, once a product has been designed and tooling made the actual "gate" price is pretty low, the "copiers" still have to do a bit of testing and get tooling so have some "R&D" and tooling costs.
Most manufacturers reduce costs, bring more customers to the market and therefore can survive with more sales at lower margins. Nobody ever has an exclusive product forever.
If Panasonic decided to keep the cost of Plasma TV's at £5k because they were first to market them where would they be now? - It is an easy one - Bankrupt.
You cannot charge 2,3 or 4 times as much for an almost identical product than your competitors and expect people to buy your product, if you reckon it is better designed etc. and with good reputation, brand awareness etc. at best I would expect a 20% premium.
The exception to this rule seems to be in the world of fashion where people will buy a T-Shirt that cost £2 to produce for £45 because of the name on the label - unfortunately for you these people do not buy too many mudslings.





