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MKT340 - Project #10 - Chapters 10 and 11 Prolect: 10 - Price a New Product For this exercise, you're the CEO of WAYMO, a

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MKT340 - Project \#10 - Chapters 10 and 11 Prolect: 10 - Price a New Product For this exercise, you're the CEO of WAYMO, a division of the Alphabet Company. You've designed, tested, and patented a self-driving system for commercial trucks. (Over the road seml- trucks such as Peterbilt, Mack, Volvo, and Kenworth.) Production and usage has been approved by the government. Your fixed costs for production are $50,000,000. Your variable cost-per-unit at 10,000 units is $60,000. You estimate an experience curve effect of 20% at higher production volumes. You estimate the total market to be in excess of 2,000,000 units. While there are numerous competitors (including the semi-truck manufacturers) working on similar systems, given your head start and patent protection, you believe you'll have 12-to-18 months before a competitive offering is approved and on the market. Once competitors do enter the market, however, they'll be formidable. Savings to the trucking companies are estimated at over $200,000 per truck. This takes into account that the vehicle may be operated 24/7 as there will be no driver restrictions related to time on the road. Your assignment is to come up with a retall price for the unit taking into account all the factors detalled. Would you use a skimming or penetration strategy? Would you price based on current costs or factor in experience curve effects? Detall your analysis and defend your recommendation

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