By the time Pure Digital Technologies introduced its first Flip in 2006, the camcorder was well into its product life cycle. The easy-to-use, pocket-size Flip reinvigorated the product category by attracting first-time buyers and casual users who didn’t like the complexity or the cost of traditional camcorders. Pure Digital sold nearly 2 million Flips in its first two years and sparked a new-product frenzy as competitors rushed to bring simple, inexpensive camcorders to market. With the Flip Mino, Pure Digital has pioneered yet another camcorder innovation. Buyers can log onto the Flip website and order a personalized camcorder by choosing from hundreds of case designs or uploading their own designs. More Flip models are on the way as the company continues its innovative ways.

1. What are the advantages and disadvantages of the Flip brand name? Do you agree with the company’s decision not to use Pure Digital Technologies as the camcorder’s brand name?
2. Pure Digital Technologies uses premium pricing for products in its Flip line. Is this strategy compatible with the use of penetration pricing for new Flip models? Explain your answer.