From the course: Pricing Strategy Explained
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T-shirt pricing case study
- Let's take a look at one product line, t-shirts, and we're going to see how the different pricing models can actually be used through that one product line. We're going to look at different types of t-shirts and see how it applies. We also have to take into account some of the variables that feed into this, things like branding, quality, demand, scarcity, uniqueness, competition, the industry overall, all factors are going to feed into how the different pricing models actually get used here. So let's take a look at a Hanes t-shirt, $5, you can get them everywhere. It's using cost-based pricing. It's a commodity and they're easy to compare as we talked about before. Now if we go down the list a little bit, let's take a look at an American Eagle t-shirt, right? $27. Now they're using market-based pricing because there's a lot of players in that kind of 20 to $30 nice, fashion t-shirt but not overly priced everyday wear.…
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