Imagine you have developed a toothbrush that will last a lifetime for a user. How will you price it?

Let’s say the company is thinking of launching the toothbrush in India and then thinking of taking it to other markets.

Many people in India still don’t use toothbrushes to brush and clean their teeth. And also the lower income families will not be interested in paying a higher sum of money for a toothbrush and they also do not replace their toothbrushes as required. So, the company would mostly be targeting the upper middle and the upper classes, who can afford to care about their teeth.

There are no toothbrushes available in the market which can last a lifetime. So, it is a highly differentiated product.

Also, the company would have spent huge sums of money in coming up with such a novel product and must have got it patented.

I am assuming that such a toothbrush has been approved by the medical/dental society to be long lasting with no harmful effects. Additionally, there are beneficial aspects to such a toothbrush.

Keeping in mind the above 4 points, the business goal of the company would be to do maximize profits with premium pricing.

To price such a toothbrush, I will calculate the cost of the currently available toothbrushes for a lifetime and add a premium as it is a highly differentiated product.

There are different types of toothbrushes available in the market such as manual toothbrush, electric toothbrush, interdental toothbrush etc.

Manual toothbrushes last around 3-4 months but people in India generally replace such brushes once a year.

Prices of manual toothbrush range from Rs 10-Rs100.

Average life expectancy is 80 years and kids start brushing teeth from the age of 3-5 years.

Cost of manual toothbrush over a lifetime = Cost of 1 brush * No. of years to brush / No, of years taken to replace such a brush

= 10 to 100 * 75 / 1 = 10 to 100*75 = Rs 750 to Rs 7500

Electrical toothbrushes last around 3-5 years (5 years)

Prices of electric toothbrush range from Rs 300-Rs3000.

Average life expectancy is 80 years and kids start brushing teeth from the age of 3-5 years.

Cost of electric toothbrush over a lifetime = Cost of 1 brush * No. of years to brush / No, of years taken to replace such a brush

= 300 to 3000 * 75 / 5 = 300 to 3000*15 = Rs 4500 to Rs 45000

So, the cost of current toothbrushes over a lifetime range from Rs 750 to Rs 45000.

Since the company is trying to maximize profit and target the upper middle and the upper classes, the toothbrush can be priced towards the higher price point of around Rs 40,000 and may be with a premium of 30%-50% charged, resulting in 1.5*30,000 = 60,000.

So, the price of a toothbrush that will last a lifetime for a user can range from 40,000 to 60,000.

Eventually, we would need to compare the R&D, marketing and other expenses cost with the expected TAM using the above price range and calculate profitability to check whether the above price range achieves the buisness goal.