Question
The question reads- Brain and Company is a consulting group that offers a fool proof pricing and revenue optimization service guaranteed to deliver $2 million
The question reads-
Brain and Company is a consulting group that offers a fool proof pricing and revenue optimization service guaranteed to deliver $2 million in benefit to a customer. It costs Brain and Company $500k to provide this service. Unfortunately they have a competitor Dissenture, that provides a similar, but somewhat inferior service that only delivers $1.5 million in guaranteed benefit. It also costs Dissenture $500k to provide this service.
a. when competing with Dissenture, what price does Brain and Company need to charge in order to guarantee that they win the business? Assume that neither Dissenture nor Brain will price below cost and that both of them know each others costs and the customer bebefits in each case.
b.How would Brains price need to change if it only cost Dissenture $400k to provide their service?
| INTRODUCTION TO PRICING AND REVENUE OPTIMIZATION includes both operational activities that involve setting and updating prices in response to market and cost changes and supporting activities that provide input to the operational activities. 2.6 EXERCISES 1. Brain and Company is a consulting group that offers a fool-proof pricing and rev- enus optimization service guaranteed to deliver $2 million in benefit to a customer. It costs Brain and Company $500,004 lo provide this service. Unfortunately , they have a competitor, Disseature, that provides a similar, but somewhat inferior, ser- vice that only delivers $1 5 million in guaranteed henetit. It also costs Dissenture $500,000 to provide this service. a. When competing with Dissenture, what price does Brain and Company need to charge in order to guarantee that they win the business? Assume that neither Dissenture nor Brain will price below cost and that both of them know each other's costs and the customer benefits in each case. b. How would Brain's price need to change if it only cost Dissenture $400.000 to provide their serviceStep by Step Solution
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