Use leather or fabrics to make pen wallets and pencil cases. Sell the wallets and cases empty. Or buy pens and pencils at trade prices and add them to the wallets and cases respectively to make the finished products.
If a business produce a product that contains such material, I think the cost is likely to be higher, therefore their pricing strategy might go with skimming pricing in order to obtain people's trusts on their quality; also its demand would conditionally become inelastic.
Firstly, lets say they sell the wallets and cases empty; customers might think of buying more pens or pencils in order to fill in their new wallet/case, though they might not to. In this case, the business may consider of loss leader pricing instead of skimming.
On the other hand, if they choose to buy pens and pencils at trade prices and add them to the wallets and cases respectively to make the finished products, customers might think the service is even more sufficient than they expected thus would be willing to pay more so the business would gain.
Diseconomies of scale
7 years ago
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