"Trueba Electronics Corporation" has developed a new testing instrument-model JJ-92-that has been designed to outperform a competitor's best-selling instrument. Model JJ-92 has a useful life of 100,000 hours of service and its operating cost is $0.50 per hour. In contrast, the competitor's product has a useful life of 20,000 hours of service and has operating costs that average $0.80 per hour. The competitor's instrument sells for $109,000. "Trueba" has not yet established a selling price for model JJ-92.
Required:
From a value-based pricing standpoint:
a. What is the reference value that "Trueba" should consider when pricing model JJ-92?
b. What is the differentiation value offered by model JJ-92 relative to the competitor's offering for each 100,000 hours of service?
c. What is model JJ-92's economic value to the customer over its 100,000 hour useful life?
d. What range of possible prices should "Trueba "consider when setting a price for model JJ-92?
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q417: Turnhilm, Incorporated is considering adding a small
Q418: Management of Thebeau, Incorporated, is considering a
Q419: Saulsberry Corporation manufactures numerous products, one of
Q420: Bochenski Mechanical Corporation has developed a new
Q421: Kingsford Pure Water Solutions Corporation has developed
Q423: Thoen Heavy Machinery Corporation has developed a
Q424: Wyler Logistic Solutions Corporation has developed a
Q425: Ralph Plastics Equipment Corporation has developed a
Q426: Aboud Industrial Products Incorporated has developed a
Q427: Eytchison Industrial Products Incorporated has developed a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents