How Does Games Workshop Justify Its High Prices?
While the company has achieved the pinnacle of competitive prices for hobby products, its pricing strategy is far from sustainable. With so many competitors putting out similar products at a lower price, the price of each model will inevitably be higher than the average. For now, the company is relying on brand loyalty to sell its models. Eventually, it will have to reduce its prices or risk being out-competed by these competitors.
Company’s pricing structure
One major problem with the company’s pricing structure is the lack of sales and discounts. There are no pre-orders, no bundles, and no sales or discounts. That’s not good for business, especially since Games Workshop relies on licensing to make money. That said, the company does have the prerogative to charge as much as it wants for its products, which is an entirely legitimate tactic.
While gaming PCs and consoles may cost less than $100 each, the Games Workshop miniatures are highly addictive. The fact that they’re so addictive makes them an excellent business model. While there are other non-core products that the company sells, such as books and video games, the company also keeps up with their customers’ preferences by offering monthly magazines. In addition to their specialized hobby, Games Workshop is able to justify its high prices by appealing to people with different budgets and hobbies.