Answer:
Explanation:
This is a step by step analysis to each of the question;
Answer 1:
Below is a reference value that shows why McDermott should consider when pricing IC-75
The unit service charge per hour should be considered when pricing IC-75 because the market perceived the product based on its hour life in the market and its maintenance cost to the customers.
Thus for current product the selling price =$1360, Maintenance cost = $280, life = 2160 hours. This means total cost to customer is $1640 for 2160 hours of operation/service life. Cost for one hour = 1640/2160 = $ 0.759
Thus for value based pricing for IC-75, the cost to customer is $ 0.759 / hour should be considered. Because this is the comparison point of products based on their cost to service hours.
The reference cost to customer for IC-75 product = $0.759*4320 = 3278.88 ~ $3280.
Answer:2
The differentiation value offered by IC-75 relative the competitor’s offering for each 4,320 hours of usage are as below
As a result low selling price based on value based pricing approach.
Lower maintenance cost $ 0.879/hour ($380 for 4320hours = $ 0.0879/hour) compared to existing competitor products $0.129/hour ($280 for 2160 hours =$0.129/hour)
Answer 3:
IC-75’s economic value to the customer over its 4,320-hour life is the cost per hour is less than the current competitor cost for one hour = 1640/2160 = $ 0.759/hour. Thus any cost lower than $0.759/hour will be the economic value to customer over 4320 hours of life.
Answer 4:
The range of possible prices should McDermott consider when setting a price for IC-75 is based on the value based pricing with respect to the competitor product. The reference selling price for IC-75 product could be equal to = $0.759*4320 = 3278.88 ~ $3279. Thus any price below $3279 will be the range that can be used for IC-75 product.
cheers i hope this helps!!!!