Home » Market and Competition in Pricing Strategy » You work for a company that makes luxury watches. The prices of watches in your product line could best be described as ranging from moderately to super expensive. Your team is considering whether or not to add a lower entry price watch to the product line. How might this decision impact pricing and sales of the product line?

You work for a company that makes luxury watches. The prices of watches in your product line could best be described as ranging from moderately to super expensive. Your team is considering whether or not to add a lower entry price watch to the product line. How might this decision impact pricing and sales of the product line?

The lower price on the least expensive model will be better because the company has had difficulty showing users the upgrades between various watch models.

The lower price will most likely cause the watch to be in the consideration set of fewer consumers.

The lower price on the least expensive model may expand the market to people who were previously excluded by the high prices, but it could damage the image of the brand.

The lower price could be a good strategic move, because company data shows that most consumers won’t upgrade to a higher price watch once they’ve purchase one.

Luxury brands often have a high price for the least expensive item in a product line because they want to build a certain image and exclude buyers seeking a lower price. The company needs to consider if the lower entry price will ultimately hurt the overall product line and brand image.