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  • EXHIBIT 11.1: Analyzing The Pricing Situation

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    This document outlines a pricing strategy framework and analyzes a pricing situation. It shows that the company's differentiated product provides $15,000 in value but costs $6,000 to produce, while competitors' commodity products offer $10,000 in value but cost $3,000. Based on an economic value model and price/benefit ratio, the company's product offers higher value but competitors' products have a more favorable price for customers.

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    This document outlines a pricing strategy framework and analyzes a pricing situation. It shows that the company's differentiated product provides $15,000 in value but costs $6,000 to produce, while competitors' commodity products offer $10,000 in value but cost $3,000. Based on an economic value model and price/benefit ratio, the company's product offers higher value but competitors' products have a more favorable price for customers.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    12 views1 page

    EXHIBIT 11.1: Analyzing The Pricing Situation

    Uploaded by

    Dewi
    This document outlines a pricing strategy framework and analyzes a pricing situation. It shows that the company's differentiated product provides $15,000 in value but costs $6,000 to produce, while competitors' commodity products offer $10,000 in value but cost $3,000. Based on an economic value model and price/benefit ratio, the company's product offers higher value but competitors' products have a more favorable price for customers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    EXHIBIT 11.

    1
    Set Pricing
    Objectives

    Analyze the
    Pricing
    Situation
    Select
    Pricing
    Strategy
    Determine
    Specific Prices
    and Policies

    EXHIBIT 11.2
    Customer
    Price
    Sensitivity

    ANALYZING
    Pricing Product
    THE PRICING
    Objectives Costs
    SITUATION

    Competitors’
    Likely
    Responses

    EXHIBIT 11.6

    Demand

    Pricing
    Competition Demand-Cost -Gap
    Objectives

    Costs

    Suppose your firm’s differentiated product provides $15,000 in value for customers and costs $6,000, whereas
    competitors’ commodity products offer $10,000 in value and cost $3000.
    EVM Value CVM Price/Benefit Ratio
    Your Product: Your Product:
    $15,000 - $6000 = $9,000 $6,000
    = 0.40
    $15,000
    Competitors’ Product: Competitors’ Product:
    $10,000 - $3,000 = $7,000 $3,000
    = 0.30
    $10,000
    Your product offers higher value than competitors’ Competitors products offer the most favorable
    products price/benefit

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