Pricing strategies

We spent a lot of time thinking about pricing. Our team used the cost-plus-margin strategy, combined with psychological pricing. We also adjusted our prices on how difficult they were to produce, the popularity of certain styles (supply and demand), and the cost price. During the market, we raised the prices on some of the more popular styles, with the most competition/demand, and lowered the most unpopular styles. The average price for our units was $4.20. This ranged from $4.99, and down to $2.99. We also tried to fit the sales price according to the percentage markup. If the percentage markup was too low for some specific products, we would add another dollar to get the best profit we could, without the prices being too high. The CP/U was 70c, which means on the styles with a higher price, we would produce more income/profit. We tried to keep the CP/U as low as possible, to ensure we would get a larger profit.

Sales and losses spreadsheet

Why we chose our idea

We thought about many different ideas, and how much demand would be wanted for each one. It went from photo frames to abstract art to coasters to decorative signs, until we landed on mini ornaments. They were targeted for years 5 to 6’s, or girls of an older age. We chose the ornaments because they are way easier to make, and takes a lot less time to produce. Overall it was the best idea, with it being cheaper and easier to make, and more time efficient.

If we were to do our project differently

If we were to create a market product again, I would get a better location for our stall, as ours was inside, in the back corner, away from the majority of people. This caused us to get less customers/consumers at our stand, as they weren’t aware of our location.  I would raise the prices a little more depending on consumer demand, as some of our items were too low, with high demand, causing them to sell out almost immediately. There was one specific style, that almost none sold. The three we had left over were all that style (we made 5 of that style). The price for them was the lowest, being $2.99. This puts into perspective that consumer demand is one of the major points. Just because something is cheaper, doesn’t raise its popularity. I would prepare packaging better, as we had these small plastic bags with silver strips of what looked like aluminium. I packaged one with the strip and it looked very bad, so we decided not to use those. From there on we just used the bags. I would add more complementary items to put the ornaments on display, so consumers could see what they would look like on certain materials/platforms. I would create more of the styles in demand and create less of the styles with the lowest demand, to create a higher sale rate.

Capabilities

We had many different capabilities involved in our project. Creativity, inquiry, problem-solving, collaboration, effective communication, leadership, organisation and resilience were all used in our project. Creativity, because we had to come up with ideas that were unique, and would sell out. Inquiry, because we had to get feedback many times to improve our ideas. Problem-solving, because we had to think about the demand, profit and losses. Collaboration, because we worked in groups for all stages of it. Effective communication, because we had to share our ideas and work on making them as good as possible.