This price is neither too cheap or very high given that it is averagely priced compared to other expensive cars which are pegged at more than AU$20 000. The proposed price takes into account factors such as cost as well as value offered by the brand. It is estimated that the cost of manufacturing a light vehicle will be around AU$5 000 so this price is reasonable given that the company will be in a position to generate reasonable profits from its operations.
The company will use the penetration strategy when the brand is launched in different markets. The marketers first skim the market in order to establish the level of response by the targeted customers. The response from the targeted buyers will be specifically used to determine the price of the light vehicle. However, this will be constantly reviewed in order to ensure that the company gets the best out of the sales of its model car. Special pricing tactics will be used in the operations of the company. For instance, price discounts can be offered to certain target groups in order to ensure that they too can be in a position to afford the vehicle. The value based approach when setting the prices will also play the trick in as far as the success of this brand in the market is concerned. This is meant to ensure that the customers will be in a position to realise the uniqueness of the model car compared to other brands offered in the market by other competitors. ...Show more