Products
The Canadian Moose Hat Company has manufactured winter hats for almost a hundred years, especially for skiers and people who go camping or hiking during the cold winter. Most hats are designed and sold to men and women aged eighteen years and above, and men represent the highest sales. The company aims to develop additional product lines, such as children’s hats, scarves, and mittens, to increase its market share. Introducing new products necessitates the development of a solid marketing plan to set fair prices and yield more profits.
Description of a New Product
The company has developed a new hat, the Stay Warm Hat, uniquely designed for babies and children up to the age of two. This product is handmade from scratch and in many colors by vibrant employees from the company, making it more attractive and durable. The company uses fine leather, fur, and other new materials to make hats. Some of these new materials include cotton and polyester, which allow the company to reduce costs and start selling to a broader population. The hat provides warmth and contains an electronic sensor that sends a signal to the parent’s smartphone or other electronic devices if the child’s head becomes too cold or too hot. Moreover, hats are helpful in the summer as they offer special protection to the sensitive top part of the head. They have further instructions on the care and cleaning procedures to ensure high maintenance. This new product has been broadly advertised and is present in many stores at an affordable price. These qualities have attracted many more customers, especially parents, who are always determined to ensure their children’s safety and well-being.
Pricing Strategy for the New Moose Hats
The Penetration Pricing Strategy
Creating a reasonable price for new products requires major considerations on aspects such as demand, competition, and costs. The company can use the penetration pricing strategy by introducing the new moose hats into the market at a relatively low price to get quick market share and customer response, then raise the prices to a considerable amount after achieving market share objectives. This strategy would allow the company to attract new customers who may appreciate a discount and retain the already existing ones. Additionally, the company will be able to improve its status and reputation, increase revenue, and secure a better future for itself.
Factors to Consider in the Pricing Strategy
There are several vital elements to consider when developing a pricing strategy for any business.
Costs, profits, and customers
The company must work out all the costs involved in production and delivery and include the fixed costs incurred regardless of sales to set a reasonable price for the new product. Profits are made when the price charged covers the cost of making the items. Moreover, the company must consider the customer response and behavior towards the new product to determine whether it suits their demands and needs. Ensuring high-quality products and creating a range of low-priced, medium-priced, and high-priced hats would help determine the price to settle on.
Competitors
Despite the Canadian moose hat company having unique products, there is still stiff competition, especially from companies specializing in sports apparel. For instance, the Nike Company has developed different shapes and colors of hats that are quite cheap and appealing to many customers, young and old. Considering this aspect, the Canadian company may have to lower their prices or add various product incentives such as extra rewards to frequent customers.