Why are new technology based products often expensive? Many companies believe that the technology they have chosen to implement is the future of the company and it will be an unbreakable product that will never be copied. Others look at the current market and see no need to implement such a complex system if they can get similar products to sell for less. In many cases, the companies in the industry simply do not know how to properly analyze the market before developing a new product. This causes them to develop a product basing on assumptions rather than an understanding of why a new technology based product is so expensive.
The problem with some new technology based products is the idea that the product must be “new” and will appeal to a new audience.
This is fine if the product has a clear advantage over its competitors, but it often means that a product has fallen outside of the reach of the average consumer. A simple solution is to create a new technology based product that solves a problem for the average consumer. If you can find a way to reduce manufacturing costs while providing customers with a better product, then you have found your saviour. You will then be able to compete with your competitors by providing a solution to their customer’s problems for less.
Why are new technology based products often expensive because the company cannot control all aspects of the cost of production? The cost of manufacturing technology usually represents one of two costs – fixed cost or variable cost. Some companies have access to resources such as equipment and staff that allow them to reduce the cost of manufacturing their product. Other companies must keep track of costs every step of the way as costs change.
What makes a technology product “inexpensive” or “cheap” is the company’s ability to control how much each part of the product will cost when they purchase it. They will be able to adjust the price according to how many units they want to sell, where they want to sell them, and how much they need to pay for raw materials. If a company is willing to take those risks in order to reduce costs, then they are free to set the price of their product accordingly.
Why are new technology based products often expensive because a new product must compete in an already crowded marketplace?
When a company creates a new technology based product, they must make sure that they can market the product effectively. It takes time for a new technology product to gain mass appeal. Once a product does gain acceptance, however, there is competition from other companies who want to market the same technology. As such, a company may not be able to sell their product at the price they want to sell it.
Why are new product prices higher than similar products from other manufacturers? The main reason that manufacturers are able to sell their products at a higher price is because they have access to more resources. Often times, companies that have the capital to develop new products can afford to charge more for a product. Other times, they can offer the product for a lower price because of their size.
Why are new technology based products often expensive because the competition is fierce?
If a new product can offer something unique that others do not, the company can run into serious competition. This is especially true with companies that develop new technologies that become standards. For example, if two companies to develop a new communication system that works in the same way, they are in a good position to sell their products at the same price. If one company makes the communication system more efficient than the other company, they may decide to go ahead and sell their systems for a lower price.
Why are new technology based products often expensive? There are a number of reasons why a company decides to charge more for a product when it becomes more technologically advanced. Of course, this doesn’t mean that the company charging more is charging a profit. Sometimes, companies need to recoup some of the cost of developing a new product and will go to great lengths to do so. Sometimes they need to make a royalty payment. Regardless of why a company charges a higher price for a newer product, it is a wise decision.