Strategy and positioning paper

Strategyand positioning paper


Strategyand positioning paper

PhoenixWinter Hat &amp Company (PWH &ampC) is involved in the making ofSuper Warm Hats. Currently, it wants to launch a new product known asMad Hatters. Therefore, it requires an appropriate pricing strategyto price the product effectively during its unveiling. The strategyto price a product is based on factors like fixedand variable costs, competition, company objectives, proposedpositioning strategies, and the target group including theirwillingness to pay.A suitable pricing strategy determines how much profits will beobtained from the sale of the hats(Blythe,2014).Too high pricing makes the customers not to buy the product, whiletoo low pricing makes the company make loses.

Theappropriate pricing strategy for Mad Hatters will be price skimmingas PWH &ampC has a significant competitive advantage in theindustry. Through price skimming, high prices are set in theintroductory phase then lowered to accommodate subsequentprice-sensitive customers. The competitive advantage emanates fromits use of multiple materials in making its products, unlike mostorganizations which use specific materials. Additionally, distinctivefeatures like hats attached with scarfs ensure that PWH &ampC iscompetitive in the industry. Another factor that will influence theadoption of the price skimming strategy is thetarget group and their willingness to buy(Blythe,2014).This includes the early adopters who never mind the pricing of aproduct as long as they are among the first owners. They then act asbrand ambassadors by inspiring others to acquire Mad Hatters.

Priceskimming strategy will help PWH &ampC to maximize the sale of MadHatters. By the time copycat companies emerge, the prices will havelowered maintaining the sales revenue from the price sensitivecustomers. This strategy will also increase the quality perception ofMad Hatters as many buyers measure quality in terms of prices. Hence,high initial pricing boosts the product in the market. Due to theuniqueness of the product, the development cost involves a largeamount of money(Marburger,2012).As such, the price skimming strategy will be helpful to recover thecosts from the first sales.

Inconclusion, the appropriate pricing strategy for Phoenix Winter Hat &ampCompany new product is price skimming. This is influenced by thecompetitiveness of PWH &ampC and the advantageous target group ofearly adopters who perceive high prices as a measure of quality. Thestrategy will help PWH &ampC to recover the developmental costfaster, improve the quality perception of Mad Hatters, and in themaximization of sales.


Blythe,J. (2014). Key Concepts in Marketing. London: SagePublications.

Marburger,D. (2012). Innovative pricing strategies to increase profits.New York: Business Expert Press.