Aggressive pricing

Read the newspaper report about SAWA, a computer games company which is introducing a new low-priced product to help win a bigger market share. Then fill each gap in the report with a phrase from the box.

aggressive pricing break even factory gate price high penetration market share premium price price war production costs recommended retail price

SAWA in low price game

The Japanese computer games company SAWA is planning an October launch for a new game called Bird. The development of the game lias taken two years but (I) advance orders are impressive. The company expects the product to (2)__

are low as the labour input in this sector is relatively small.

Margins in computer games are usually high, but SAWA has promised a (4)_.

strategy, with a competitive pricing policy. This is a change of policy for SAWA, whose products have always carried a (5)_, SAWA

being a relatively exclusive brand.

The (6) ______ is expected to be round $55, with the

(7 )_being around

33% of that. Such a low price may have the effect of creating a

(8) ______in the computer games market. (9)_is a new policy for SAWA, as the company aims to increase its (10)

in the lower end of the games market.

A further point of interest is that SAWA predict a long shelf-life for Bird, perhaps five years, which is longer than normal in this sector.

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