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Essay text:
Therefore to reduce the impact on end consumers, we will set only a price structure of 45 percent mark-up of the wholesale cost.
The price structure will also follow a skimming pricing strategy. As EasyTabs is the first of its kind product in the market, we do not have to set a very competitive price in its beginning. We forecast that imitations or competitors will start entering the market in 6-12 months time. And when that happens, we will then look into the market situation and bring down the pricing to a competitive range.
The estimated cost structures are as followed:
(Per month for the first year of launch, with forecasted sales of 1500 units/ month)
Total costs:
Fixed cost: $15,000
Variable Cost ($11/Unit) $16,500
$31,500
Average Cost: $31,500
1500 = $21 per unit
Wholesale price (45% mark up) = $30...
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