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Re: [OM] Beattie Out of Business?

Subject: Re: [OM] Beattie Out of Business?
From: "John Hermanson" <omtech@xxxxxxxxx>
Date: Tue, 6 Nov 2001 12:20:43 -0500
A photo on their site shows a screen being cut, that is, one at a time.
Lots of work to make one screen.

John  Hermanson
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----- Original Message -----
From: "Garth Wood" <garth@xxxxxxxxxxxxxxx>
To: <olympus@xxxxxxxxxxxxxxx>
Sent: Tuesday, November 06, 2001 11:44 AM
Subject: Re: [OM] Beattie Out of Business?


| At 07:16 AM 06/11/2001 -0800, you wrote:
|
| [snip]
|
| >Oh #2: There might be only one or two cents of material in one
| >of those screens, but engineering, manufacturing overhead,
| >marketing, taxes, distribution and an acceptable profit
| >(remember this isn't a high-volume product) all contribute to
| >the pricing of those screens.  A healthy dose of manufacturing
| >and sales experience will teach you a thing or two about
| >pricing.  Feel free to build your own, Larry.
|
| Indeed.
|
| Having been involved in product development and promotion/marketing, I
found that the minimum mark-up from development costs alone that would
ultimately allow for any sort of profit whatsoever on a product was about
400%, give or take a few percentage points.  As it turns out, there are huge
human, financial and technical obstacles between a product's development and
its final delivery to the end customer, and production costs of the second
and subsequent units were almost irrelevant in the pricing decision.
|
| As the saying goes, "The *second* Cipro tablet cost Bayer AG two cents to
make.  The *first* one cost five hundred million dollars."
|
| Garth
|
|




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