The price must be “ right” to penetrate the market, maintain a market position, and produce profits. A number of pricing strategies should be examined, and then one should be convincingly presented. This pricing policy should be compared with the policies of the major competitors. The gross profit margin between manufacturing and final sales costs should be discussed, and consideration should be given to whether this margin is large enough to allow for distribution, sales, warranty, and service expenses; for amortization of development and equipment costs; and for profit. Attention also should be given to justifying any price increases over competitive items on the basis of newness, quality, warranty, or service.