Question
You are a software-marketing expert. A new soft- ware development firm has hired you to advise it on pricing and marketing strategies of its new
You are a software-marketing expert. A new soft- ware development firm has hired you to advise it on pricing and marketing strategies of its new application. After some research, you conclude that the firm can be successful either by selling at a high unit price (in which case, probably only businesses would purchase licenses to use the application), or at a very low price, which would be attractive to many individuals and companies. You estimate that by the end of the sixth year of the marketing effort competing software will be offered, which will bring the number of units sold to zero. For alternative A, the price would be $350 per license, and you expect 600 adopters in the first year and an annual growth of adopters of 50 percent. For alternative B, the price would be $25, and you expect 25,000 adopters in the first year and an annual growth of adopters of 5 percent. Use a spreadsheet application to cal- culate revenue, and tell the firm which strategy is expected to bring in greater revenue. Enter the prices and number of first-year adopters for each alternative only once, each in a single cell, and use absolute referencing to those cells.
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