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# Selective pricing of technology products

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Apple has recently launched the iPod nano under two different versions:2GB and 4GB. There are two types of
consumers of the iPod nano.Type 1 has relatively narrow musical tastes and can easily do with less than 500 songs.These consumers are willing to pay \$200 for a 2GB or a 4GB.Type 2 consumers like to listen to many different songs.These consumers are willing to pay \$220 for a 2GB
nano and \$270 for a 4GB nano.Apple estimates that there are 20 million type 1 consumers and 15 million type 2 consumers.Ass me that it costs \$50 to produce an iPod nano regardless of its capacity (2GB or 4GB).

(a) Suppose first that Apple were to sell only 4GB iPods (after all,they cost the same and some consumers prefer more than less). What is the optimal price for a 4GB iPod?What is the profit?

(b) Suppose now that both models are introduced on the market.What are the optimal prices for the two models (make sure to explain your reasoning very carefully). What is the profit? How is this pricing scheme called?Briefly discuss what is its purpose and why it could be useful.

https://brainmass.com/economics/technology/selective-pricing-technology-products-436764

#### Solution Preview

You are best off using the valuations of the consumers themselves. This is because your prof hasn't given you an actual demand curve, just points. Anywhere between the points it makes more sense to get to a point. From example, at \$210 you will lose all Type 1 cons and Type 2 consumers would be willing to pay \$220.

a. If it sells only 4GB.

It can sell them all for \$200 for a total revenue of = \$150*35 million = 5250 million
It can sell them all for \$220 for a total revenue of = \$170 *15 million = 2550 million
It can sell them all for \$270 for a total revenue of = \$220 * 15 million = 3300 million.

Conclusion, if there is no price differentiation, it is ...

#### Solution Summary

Apple has recently launched the iPod nano under two different versions:2GB and 4GB. There are two types of
consumers of the iPod nano.Type 1 has relatively narrow musical tastes and can easily do with less than 500 songs.These consumers are willing to pay \$200 for a 2GB or a 4GB.Type 2 consumers like to listen to many different songs.These consumers are willing to pay \$220 for a 2GB
nano and \$270 for a 4GB nano.Apple estimates that there are 20 million type 1 consumers and 15 million type 2 consumers.Ass me that it costs \$50 to produce an iPod nano regardless of its capacity (2GB or 4GB).

(a) Suppose first that Apple were to sell only 4GB iPods (after all,they cost the same and some consumers prefer more than less). What is the optimal price for a 4GB iPod?What is the profit?

(b) Suppose now that both models are introduced on the market.What are the optimal prices for the two models (make sure to explain your reasoning very carefully). What is the profit? How is this pricing scheme called?Briefly discuss what is its purpose and why it could be useful.

\$2.19

## Marketing Management Case--Agilent Technologies

I need assistance with the following questions based on the attached case study for an MBA Marketing Management course. The case is in one file, the exhibits are in another.

[Q1] Essay -
Describe the relevant market boundaries (Guiltinan Paul and Madden, chapter 3) and What are the determinant attributes for the "test and measurement " market that Agilent Technolgies participates in.

[Q2] Essay
Compare the primary and secondary/selective demand for this market. In what ways can Agilent increase primary demand? secondary/selective demand?

[Q3] Essay -
Perform a SWOT(strength, weakness, opportunity, and threats) analysis for Agilent technolgies

[Q4] Essay -
Product Positioning Maps are an important way to access the firm's competitive position. Once such map is found in Figure 4-4 and Figure 4-6 in Guiltinan Paul and Madden chapter 4. Create a perceptual map of your choice for the test and measurement market.

[Q5] Essay -
If you were to segment the market (I want you to define your segments) how would you describe the typical decision making process for selecting a supplier for each of your segments? You may use the Positioning graph from the mini-lecture to illustrate this. Remember it is often wise to start with Geographic Segmentation and then define your segments within each geographic region. Since this is a business to business case study, you would also normallly segment by industry after you segmented geographically. Note your case also indicated that these segments can be divided further.

[Q6] Essay -
What would the relevant market mix be for each of your segments, that were defined in part 5.

[Q7] Essay -
Based on the information in the case and your competitive analysis,which segment of the market should Agilent target, and how should the position themselves against the competition (positioning is described in one of the mini-lectures)?

[Q8] Essay -
Strategic Business Analysis can involve one of many tools, it might use a Portfolio Analysis tool or it may look at the product life cycle. 1) Analyze the Product life cycle for this service - what cycle is their product technology in 2)How does the product life cycle typically affect the marketing mix for products as technolgy matures?

[Q9] Essay -
Based on your SWOT analysis, competitive analysis, and SBU analysis what 'COMPETITIVE' marketing strategy do you recommend (once more see appropriate mini-lecture)? Explain..

[Q10] Essay -
Based on primary and secondary demand constraints, and the product-life for these components, what "GLOBAL OR WORLD MARKET' strategy (refer to corporate strategy mini-lecture) do you recommend Agilent follows if they wanted to strengthen their competitive position in the world market as well as domestically?

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