Pricing Mini Case: Mobile App Pricing Strategy

Imagine you are the CMO (Chief Marketing Officer) for Poochie Pal Selfies, a mobile app for Android phones. Poochie Pal Selfies is a little like Instagram, but it is designed solely for the use of sharing adorable photos of pets (dogs, cats, boa constrictors, etc.). You have not yet decided how to price this mobile app, but you did hire a marketing research company to evaluate four different pricing strategies and have them present to you a conservative, most likely, and optimistic forecast for each of the pricing strategies. The marketing research company based its reported numbers based on forecasts for the first year of Poochie Pal Selfies.

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Click the icon to view the summary of pricing strategies.

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Click the icon to view the spreadsheet included.

If you knew the CEO is extremely conservative, what would be your recommendation?

Strategy 4: Paid ($3.99 pricing)

Strategy 1: Free

Strategy 3: Paid ($0.99 pricing)

Strategy 2: Freemium

with the maximum total revenue of

$nothing.

(Round to the nearest dollar.)

Homework: Chapter 10 Marketing Metrics Score: 0 of 6 pts Metrics 10.2 2 of 2 (0 complete)Y Pricing Mini Case: Mobile App Pricing Strategy imagine you are the CMO (Chiet Marketing Officer) for Poochie Pal Selies, a mobile app for Android phones Poochie Pal Selfies is a littie ike Instagram, but it is designed solely for the You have not yet decided how to price this mobile app, but you did hire a marketing research company to evaluate four different pricing strategies and have them present to you a conser The marketing research company based its reported numbers based on forecasts for the first year of Poochie Pai Selfies Cick the icon to vew the summary of pricing strategies EEl Click the scon to view the spreadsheet included If you knew the CEO is extremely conservative, what would be your recommendation iwith the maxmum total revenue of S Round to the nearest dollar , g Metrics 2 of 2 (O complete)Y HW Score: 0%, 0 of 1 E Question Help nobile app tor Android phones Poochie Pal Selfties is a itle like Instagram, but t is designed solely for the use of sharing adorable photos of pets (dogs, cats, boa constrictors, etc. eting research company to evaluate four diflerent sts for the first year of Poochie Pail Selfies pricing strateges and have them present to you a conservative, most ikely, and optimistic forecast for each of the pricing siraleg dation? und to the nearest dollar) Homework: Chapter 10 Marketing Metrics Score: 0 of 6 pts Metrics 10.2 2 of 2 (0 complete) Pricing Mini Case: Mobile App Pricing Strategy lmagine you are the CMO (Chief Marketing Officer) ftor Poochie Pal Selfes, a mobile app for Android phones Poochie Pal Selifies is a little lIke Instagra You have not yet deci The marketing research company based its reported numbers based on forecasts for the first year of Poochie Pal Selfies ded how to price this mobile app, but you did hire a marketing research company to evaluate four diferent pricing strategies and Click the icon to view the summary of pricing strategies EEB Click the icon to view the spreadsheet included If you knew the CEO is extremely conservative, what would be your recommendation? with the maximum total revenue of S(Round to the nearest dollar) Strategy 4 Paid ($3 99 pricing) More Info Strategy 1 Free Strategy 3 Paid (S0.99 pricing) Strategy 2 Freemium Summary of pricing strategies 1. The first strategy is to strictly give away the app for free. Money will be made by serving mobile ads to users 2. The second strategy is to use a "freemium* model. The app will be given away for free (without ads) but useability will be somewhat restricted in the free version. Users are allowed to unlock various features by paying money 3 The third strategy is to simply charge S0 99 for a completely unlocked ad-free version of the app 4. The fourth strategy is to charge $3 99 for the unlocked, ad free app While the fourth strategy would make more revenue per person, fewer people would be willing to pay $3 99 Although many other pricing strategies could be considered the CEO has already decided that only these four strategies will be considered The spreadsheet included has the information the marketing research company provided you for each of the four pricing strategies. For the first strategy, the estimated number of users, the number of ads you will be able to serve to each user, and the likely price per thousand mobile banner ad impressions is given for a conservative, most likely, and optimistic scenario The second strategy includes both the total number of users as well as the number of user who will Enter your answer in the answer box and by upgraded features Strategies three and four estimate the total number of app purchasers Strategy 1: FREE (mobile ads served Conservative Most Likely Optimistic Mobile Ad Estimated RPM (revenue per thousand ads $0.26 shown) Mobile Ads served per user per year Number of users S0.65 250 500 25,000 800 114,191 5,000 Strategy 2: FREEMIUM Total number of users Number of users who upgrade Avg. Revenue per upgrading user Conservve Most LikelyOptimistic 25,000 1,000 $3.00 7,500 150 $1.05 84,274 5,056 $12.00 Strategy 3: PAID (S0.99 pricing) Total number of users Price Conservative Most Likely Optimistic 6,250 $0.99 938 S0.99 39,176 $0.99 Strategy 4: PAID ($3.99 pricing) Total number of users Price Conservative Most LikelyOptimistic 1,250 $3.99 125 $3.99 15,165 $3.99 Homework: Chapter 10 Marketing Metrics Score: 0 of 6 pts Metrics 10.2 2 of 2 (0 complete)Y Pricing Mini Case: Mobile App Pricing Strategy imagine you are the CMO (Chiet Marketing Officer) for Poochie Pal Selies, a mobile app for Android phones Poochie Pal Selfies is a littie ike Instagram, but it is designed solely for the You have not yet decided how to price this mobile app, but you did hire a marketing research company to evaluate four different pricing strategies and have them present to you a conser The marketing research company based its reported numbers based on forecasts for the first year of Poochie Pai Selfies Cick the icon to vew the summary of pricing strategies EEl Click the scon to view the spreadsheet included If you knew the CEO is extremely conservative, what would be your recommendation iwith the maxmum total revenue of S Round to the nearest dollar , g Metrics 2 of 2 (O complete)Y HW Score: 0%, 0 of 1 E Question Help nobile app tor Android phones Poochie Pal Selfties is a itle like Instagram, but t is designed solely for the use of sharing adorable photos of pets (dogs, cats, boa constrictors, etc. eting research company to evaluate four diflerent sts for the first year of Poochie Pail Selfies pricing strateges and have them present to you a conservative, most ikely, and optimistic forecast for each of the pricing siraleg dation? und to the nearest dollar) Homework: Chapter 10 Marketing Metrics Score: 0 of 6 pts Metrics 10.2 2 of 2 (0 complete) Pricing Mini Case: Mobile App Pricing Strategy lmagine you are the CMO (Chief Marketing Officer) ftor Poochie Pal Selfes, a mobile app for Android phones Poochie Pal Selifies is a little lIke Instagra You have not yet deci The marketing research company based its reported numbers based on forecasts for the first year of Poochie Pal Selfies ded how to price this mobile app, but you did hire a marketing research company to evaluate four diferent pricing strategies and Click the icon to view the summary of pricing strategies EEB Click the icon to view the spreadsheet included If you knew the CEO is extremely conservative, what would be your recommendation? with the maximum total revenue of S(Round to the nearest dollar) Strategy 4 Paid ($3 99 pricing) More Info Strategy 1 Free Strategy 3 Paid (S0.99 pricing) Strategy 2 Freemium Summary of pricing strategies 1. The first strategy is to strictly give away the app for free. Money will be made by serving mobile ads to users 2. The second strategy is to use a "freemium* model. The app will be given away for free (without ads) but useability will be somewhat restricted in the free version. Users are allowed to unlock various features by paying money 3 The third strategy is to simply charge S0 99 for a completely unlocked ad-free version of the app 4. The fourth strategy is to charge $3 99 for the unlocked, ad free app While the fourth strategy would make more revenue per person, fewer people would be willing to pay $3 99 Although many other pricing strategies could be considered the CEO has already decided that only these four strategies will be considered The spreadsheet included has the information the marketing research company provided you for each of the four pricing strategies. For the first strategy, the estimated number of users, the number of ads you will be able to serve to each user, and the likely price per thousand mobile banner ad impressions is given for a conservative, most likely, and optimistic scenario The second strategy includes both the total number of users as well as the number of user who will Enter your answer in the answer box and by upgraded features Strategies three and four estimate the total number of app purchasers Strategy 1: FREE (mobile ads served Conservative Most Likely Optimistic Mobile Ad Estimated RPM (revenue per thousand ads $0.26 shown) Mobile Ads served per user per year Number of users S0.65 250 500 25,000 800 114,191 5,000 Strategy 2: FREEMIUM Total number of users Number of users who upgrade Avg. Revenue per upgrading user Conservve Most LikelyOptimistic 25,000 1,000 $3.00 7,500 150 $1.05 84,274 5,056 $12.00 Strategy 3: PAID (S0.99 pricing) Total number of users Price Conservative Most Likely Optimistic 6,250 $0.99 938 S0.99 39,176 $0.99 Strategy 4: PAID ($3.99 pricing) Total number of users Price Conservative Most LikelyOptimistic 1,250 $3.99 125 $3.99 15,165 $3.99