Hi Elizabeth,
There are complete papers about consumer behaviour in marketing and this is not the forum to talk about it. Nevertheless I am pretty confident that if Letus talks about 15K list price with 10K discount or 10K with 5K discount or whatever, it won’t get many people to buy.
MoVI was a special case. The unprecedented hype created by Vincent Laforet can’t be matched. MoVI was the first to offer such a value proposition. So there was no benchmark about pricing. So there were people who bought at 15K. MoVI still continues with its Premium Pricing strategy and occupies premium positioning in the minds of people. So it will remain successful for sometime, unless it stops innovating and differentiating its products from others.
Many corporates employ a Market Skimming strategy. So they launch a product at one price point and when at that price point they have got all the consumers, they lower the price either by lowering list price or giving discounts and reach the next level of customers.
Some follow cost plus pricing. However, this pricing is not cast in stone. For example, if there is huge demand and the company has to set up new lines ie incur capital investments, then it has to recoup from its sales. So often the companies try to sell some new variants at a different price level and calculating actual product variantwise profits become difficult.
Some companies want to penetrate the market and employ an attractive pricing to attract new customers. A company like Letus entering the market after a year of MoVI and many other gimbals, has to find customers who have not already bought would benefit from using the market penetration pricing strategy. With each passing day the overall market size becomes smaller as they are competing with many gimbals in the market. The price will fall rather than go up till there is the next level of disruptive innovation.
If you would have looked at the Kickstarter of the gimbals at 5K + USD did you see many people buying it at that price? Do you think Letus wants to sell only a handful of gimbals? Ofcourse Letus brand is more well known than those Allsteady, Ultimate7 etc.
However, is Letus a premium brand like OConnor, Arri etc that it can go for premium pricing? The perception already associated with a brand matters a lot. So anyone who is talking about pricing at the level of MoVI and offering 10K discount is not aware about consumer behaviour. Even if companies like Arri and OConnor are to enter this market, they won't have that euphoria generated like MoVI. The market, or major parts of the market has moved.
The gimbal wars will intensify. Any company which doesn’t grab consumers in the immediate term will face a big challenge. Redusers form a good and vocal group who will serve as good ambassadors. So special pricing for redusers is important to lock them into Letus ecosystem. I am using the word ecosystem because someone can now buy one axis or three axis and lateron buy other stuff to make it 4axis.
Also many people who would have not bought a gimbal now, would get attracted to buy one immediately if there is a special discount. That is the attraction of group buys in reduser and it also gives the company a lot of tailwind.
If some of you vocal folks believe that this meagre 105 usd discount will ensure very good initial adoption from redusers then lets wait and watch. I believe it could have been a phenomenal group buy. Anyway, it is upto Letus to decide what is best for them.
Cheers,
Sabyasachi
Sabyasachi,
We hear you. As we said, we are looking at ways to make RU's happy. First, you are first in line to get it, the $100 is just a token, not the token. I hope you can see our honest way of pricing. Functionality wise, we beat the crap out of anybody and to say that we have to price it under them with our long standing on the market is just......
We chose to price it at that range not because we couldn't match other's functionality or reputation, we chose to price it there simply because we think we could get it done around that price point and we rather make it affordable to the whole community than just a few rich kids. Please don't punish us for doing that.
The current pricing, please remember is introductory pricing, it may go up as we may incur some unforeseeable manufacturing costs.
We planned to release our Letus Extreme at $1500 and we had introductory price at $1200. We was able to keep it at that price because the demand was so high, tens of thousands of users supported us. $4k is our introductory price. We try to set it as low as possible, assuming the same support level as our Letus Extreme. You know with the cost of R&D, we cannot afford to sell only few hundred rigs and call it good at this price.
Hope this clears the air a little bit.