Launch of A New Wireless Content Technology Case Study Help
Phase 1
Answer 1
According to the survey's findings, 20% of respondents would pay $400 for the device with a one-year subscription, and 30% would pay $275. For the device and subscription, the average person is willing to spend $337.50, according to this statistic.
The mark-up should be 33.75% if we consider that the item and subscription cost $250.
Note: For calculations refer to Exhibit 1
Answer 2
There are a few issues that are connected to this survey and its capacity to offer useful data for the subscription plan's pricing.
First, since the poll was carried out in malls, it is possible that the findings are inaccurate regarding the general populace.
Second, the study only inquired about respondents' willingness to purchase the item at a particular cost. They were not questioned about how frequently they would use the device or how much they would appreciate the various channels offered as part of the subscription.
Third, since the study was carried out before to the product's introduction, it is likely that people's willingness to pay has altered since that time. The following list of additional survey-related concerns is also provided:
Regardless of these concerns, the survey's findings do offer some useful information on the subscription plan's pricing. According to the findings, individuals are willing to pay more for the ability to watch live TV on their mobile devices. The statistics also imply that consumers are price-sensitive, thus the subscription cost should not be excessive.
Phase 2
Answer 1
A $30 monthly subscription fee is suggested based on the findings. This cost is based on a 12-month average of $337.50 in willingness-to-pay for the device and subscription.
This recommendation raises some issues, some of which are listed below:
The survey's findings might not be typical of the general populace.
How frequently respondents would use the gadget or how much they would value the various channels offered as part of the subscription were not questions in the study.
It's likely that since the study was performed before the product was made available, people's willingness to pay has altered.
To gain a deeper understanding of consumer demand for the product and readiness to pay, it is suggested to do more research. Surveys, focus groups, and market analysis might all be a part of this research. It will be easier to decide on the best price for the subscription plan once a deeper grasp of the market has been obtained.
A $30 monthly subscription fee can be seen as a reasonable place to start. However, it is additionally suggested to carry out more investigation before making a final choice.
Phase 3
Answer 1
1a. For the subscription plan in 1(a), the EVC demand curve has a declining slope. The proportion of customers willing to pay for a subscription declines as the cost of the subscription rises.
The different features (Base Device, NBC, CBS, and ESPN) are represented on the x-axis, while the matching Willingness to Pay (WTP) values for Segment 1 are shown on the y-axis. The curve demonstrates how the WTP values fluctuate as the subscription plan's features are priced differently.
Note: For graph refer to Exhibit 2a
1a. The new EVC demand curve for the plan offered in 1(b) is also a downward-sloping curve. However, the curve is shifted to the right compared to the curve in 1(a). This is because the addition of STARZ to the subscription plan makes it more attractive to consumers, so more consumers are willing to pay for the subscription.
The graph display the new EVC demand curve for the alternative subscription plan. The x-axis represent the different features (Base Device, NBC, CBS, ESPN, ABC, STARZ), and the y-axis represent the corresponding Willingness to Pay (WTP) values for each segment. The curve show how the WTP values change as the features of the alternative plan are offered at a fixed price of $50 per month for all customers.
Answer 2
In Phase III, we have the willingness to pay (WTP) values for different features and segments. The WTP values represent the additional amount customers are willing to pay for each feature or channel.
Based on the information from Phase III, considering the current subscription plan offered by the firm (1(a)), the revenue-maximizing, monopoly price of the subscription for a month could be determined as highest subscription price among the segments. That we can calculate by determining the subscription price for each segment that corresponds to the total WTP value for that segment. In this case, the revenue-maximizing price is $121.45 (for Segment 3)..............
Launch of A New Wireless Content Technology Case Study Help
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