When a product is first released onto the market, it is in the development stage of its life cycle. Sales are often low at this point since customers are not familiar with the new product.
When a product is unique, sales might be delayed since there may not be any immediate demand from customers. Still, there isn't much competition in general.
You can decide to step up your marketing efforts at this point to spread the word about the new product. By using resources like your company website and social media networks, you can advertise the product with a corresponding budget. Keep in mind that your marketing materials should provide a detailed description of the product.
It might be expensive to develop a new product, so you need to develop a pricing plan that will make your efforts pay off. What should the pricing strategy look like at this stage? Depending on their sector and financial expectations, companies can overprice their products or, vice versa, offer discounts:
- Low product prices (market penetration) can force a company’s entry into the market and increase customer interest. Prices usually go up when the consumer base becomes devoted to the company.
- To generate a rapid profit and cover development expenditures, you could charge extra (use price skimming). High product prices are preferable when there is little competition.