Interesting test was made by BOLT, they investigated what is the real total “manufacturing” cost of a Beats headphone and how this compares to the market price.
So the difference is 182,11 dollars, which is quite a big difference compared to the market price: 1178%
I think Beats did a great job and this example clearly shows that they were able to differentiate on the market! I am only speaking about differentiation when consumers are willing to pay more money for the same think. I am so -so super tired with all this bullshit differentiation you can see on the market, when the CEO of an absolute boring company speaks how successfully they will differentiate on the market!
The measure is clear for everyone, my differentiation formula: differentiation = willing to pay more!
I estimate that the COGS without labor or shipping is $16.89 – yet Beats is able to successfully retail these headphones for $199+. This is the power of brand; Dr. Dre and Jimmy Iovine have leveraged their personal backgrounds and a sleek design to launch a remarkable brand that’s become fundamental to music pop culture.