Assignment
Chapter 3: Price and Value Communication
Electric Car Company
Your company is planning to launch a new electric car, differentiated by various proprietary energy-saving features that enable it to travel much further on a single overnight charge than any all-electric competitor. The car can travel an estimated 90 miles in all-electric mode. The basic car is expected to be cheaper than any other new car alternative for people who want only cheap, local transportation, since it will qualify for the same tax credit incentives as other fuel-efficient cars. Your company can also offer a variety of options, which it could choose to bundle or offer separately. They include:
• 5hp gasoline engine and 3-gal. tank, which extends range between charges to 250 miles (150 between refills without recharging). Variable cost to make is low relative to price difference between this all-electric car and cheapest hybrids.
• Air conditioning which, despite awesomely high efficiency, can cut range to 45 miles in all-electric mode or 250 miles with gas supplement if run continuously. It is also, unfortunately, much more costly to produce than traditional auto AC systems.
• Metallic paint, which creates a unique "electric" appearance that complements the car's ability to go from 0 to 60mph in just four seconds.
Without any of the options above, the car will sell for much less than any of the leading hybrids.
What prices structures (à la carte, bundled, or included with car) and levels would you choose to maximize your profitability from sales of the "options"? Assume that there are easily observable individual reference prices from other manufacturers for each of these options. Specify your proposed price levels as "BR" for below reference, "NR" for near reference, and "AR" for above reference. Make clear your assumptions about the willingness to pay by segment.
Chapter 5: Pricing Policy
Policy Evaluation
1. For each of the following pricing policies, state whether or not you think it is a profit-enhancing, profit-destroying, or neutral policy and explain your rationale.
a) Giving double or triple frequent flyer miles to induce customers to try the airline on new routes where competitor's already exist.
b) Giving airline passengers who have a bad experience (e.g. seriously delayed flight due to equipment problem) bonus frequent flyer miles as compensation, even though not required legally to do so.
c) Guaranteeing that if customers can find a better price on any web site for the same flight, time, and class the airline will refund the triple difference versus price paid for a ticket on the airline's own web site.
d) Guaranteeing that if customers can find a better price on any website from any airline for a ticket on same day and the same class of service, the airline will refund the difference.
2. A local health club offers is trying to induce new memberships in January as people are making new resolutions to lose weight. They are considering reducing the rate to $75/month for the first four months of an annual membership costing $100/month. Describe at least two alternative policies for inducing trial and explain why you believe your alternatives are more likely to maximize the club's revenue over the next year.
3. You are the manufacturer of medical tests used in hospitals for which a typical hospital will spend $20,000 to more than $100,000 per year. Unfortunately, a problem with your manufacturing process forced the closure of a plan producing some of your most popular tests for 11 months. Customers were forced to adopt competitive tests, often requiring retraining. Now you want to win customers back who liked your product but are angry about the costs they had to bear. Describe the elements of a "win back" program that you would adopt to maximize the cost-effective recovery of revenue share over the forthcoming year.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- TEMPLATE-FOR-CASE-ANALYSIS.rar