Pricing Fall07 Stu Essay examples

Estimating Fall07 Stu Essay models Estimating Fall07 Stu Essay models Estimating Strategies Week 6 EWMBA 206 Ganesh Iyer 1 Examination Framework Contender Examination Perceptual mapping Organization Analysis Advertising Myopia First mover preferences Client Analysis Situating Division Showcasing Strategy Valuing process Valuing and advancement Item Showcasing Orientation Marking Cost Advancement Spot Market Ganesh Iyer 2 Financial matters of Pricing Two Problems with Single Price Strategy ï  ± Leave cash on the table ï  ± Some clients are happy to pay more ï  ± Leave behind Profit ï  ± Some potential clients were not served despite the fact that the firm could have served them at costs over the negligible expense Ganesh Iyer 3 Value Discrimination Customization by Observable Characteristics In light of perceptible attributes that signal buyers’ value affectability ïÆ'Ëœchessclub.com/: Students: $29.95/year; Adults: $59.95 ï  ¬ AMC theaters can watch the customer type utilizing his understudy ID, seniors  » Customer 1 No understudy ID $6.75  » Customer 2 Haas understudy ID $4.75  » Customer 3 Haas understudy ID $4.75  » and so on. Ganesh Iyer 4 Value Discrimination Buy Location ï  ± Customers at various buy areas have distinctive value affectability ï  ± Cure for Bacillus anthracis: $450 in the U.S. $190 in Canada canadadrugs.com ï  ± Staples site requests postal district staples.com/ ï  ± Select division factors that guarantee ï  ± various sections buy at various areas ï  ± sufficiently high delivery cost to forestall exchange Ganesh Iyer 5 Redo By Time of Purchase ï  ± Pinnacle load evaluating: intended to re-circulate use from top time to off-top time ï  ± Redeye flight. ï  ± Electronic street evaluating. Ganesh Iyer 6 Electronic Road Pricing Ganesh Iyer 7 Value Discrimination Palm Pilot: Product-line in real life Palmm505 Palmm500 Palm VIIx $399 Shading $399 $449 Palm Vx $299 Palm IIIxe $179 Palm m100 $129 Ganesh Iyer 8 Microsoft Office: Product offering (Versioning) in real life Office 2000 Engineer Office 2000 Premium Office 2000 Private venture Ganesh Iyer Office 2000 Proficient Office 2000 Standard 9 Step by step instructions to Price Discriminate Using through Product Line Design? ï  ¬ Key to Successful Versioning ï  ² Identify the most ideal approaches to recognize the various variants of the item/administration ïÆ'Ëœ Need to figure out which highlights will be profoundly significant to certain clients yet of little incentive to other people. ïÆ'Ëœ Goal: Create the â€Å"right† # of forms focused at the â€Å"right† client fragments by setting the â€Å"right† costs. ï  ² Strategic Issue Cannibalization: Will the top of the line clients purchase the more costly form? How to deter them from purchasing the lower valued form? Ganesh Iyer 10 Product offering (Versioning) Division, Targeting and Cannibalization ï€ Model 1: Pricing Dell Laptops ï€ Table: Perceived Economic Value Individual Users ï€ Business Users ï€ Fragment Size 60 40 ï€ Dell 350 MHz $ 500 $ 750 ï€ Dell 550 MHz $ 750 $ 2500 Ganesh Iyer 11 Product offering (Versioning) Division, Targeting and Cannibalization ï  ° Model 1: Pricing Dell Laptops ïÆ'Ëœ Choice I: Dell 350 MHz in particular: ï  ² Targeting: Business Users †Price $ 750 †Total Revenue $ 30,000 ï  ² Targeting: Business Users and Personal Users †Price $ 500 †Total Revenue $ 50,000 ïÆ' ° Ganesh Iyer Ideal focusing on if presenting 350 MHz: Business Users + Personal Users 12 Product offering (Versioning) Division, Targeting and Cannibalization ï  ° Model 1: Pricing Dell Laptops ïÆ'Ëœ Alternative II: Dell 550 MHz in particular: ï  ² Targeting: Business Users †Price $ 2500 †Total Revenue $ 100,000 ï  ² Targeting: Business Users and Personal Users †Price $ 750 †Total Revenue $ 75,000 ïÆ' ° Ganesh Iyer Ideal focusing on if focusing on 550 MHz: Business Users 13 Product offering (Versioning) Division, Targeting and Cannibalization ïÆ'Ëœ Choice III: Both 350 MHz and 550 MHz : ï  ² What will be the cost of 350 Mhz = 500 ï  ² What are the alternatives accessible to Business Users? ï  ² Buy 350 MHz at $ 500 or 550 MHz at $ X? ï  ² Surplus from 350 MHz = $ 750 - $ 500 = $ 250 In this manner, cost of 550 MHz