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Festhalten Hand And Wrist Bands: A Case Study

825 Words4 Pages

The Festhalten Hand and Wrist Bands will be priced using cost based pricing. The company’s major current distribution channel is straight to consumer via their website. The company also distributes product to local gyms and will continue to for this product. Unlike its competitors, Festhalten will be using a cost based pricing instead of a customer value based pricing.
According to Phalguni Soni, Nike has a significant amount of “brand power” (2014). Nike has a “strong brand image, tradition of introducing innovative products to the marketplace, current product stable, and high-profile endorsements from world-class athletes” (Soni, 2014). Due to the company’s strong brand that it has built over the years, Nike has built a strong customer customer base. In an article written by Leonie Barrie, Barrie quotes the Chief Financial Officer of Nike saying “the strength of our brand and the innovation in our products means that there is great consumer value proposition at higher price points” (Barrie, 2014). Meaning that the Nike customers see so much value in the Nike products that the customers are willing to pay a high price for it.
Since Nike prices its products based on its perceived value and strong brand, it makes no sense for the Festhalten company to …show more content…

One form distribution is to local gyms. Currently, Festhalten has agreements with gyms that basically says that the CEO of the company will drop off product and either the company will have an event there and sell them or Festhalten will give the gyms a small quantities of products to sell. Then the gym and Festhalten will split the revenue for the sale. The other form of distribution Festhalten utilizes is direct to consumer. Current product can be bought on the Festhalten website through their online store. When a customer goes online to buy the product, the company is paid directly by the customer. Then the company sends the customer their

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