Let’s suppose that fresh out of college, you land a job at Ford. Your first assi
ID: 364451 • Letter: L
Question
Let’s suppose that fresh out of college, you land a job at Ford. Your first assignment is to figure out how to price and/or package the options that Ford offers for its model known as the Fiesta. You are told that Ford sells the Fiesta to three different types of customers (in equal numbers). The three options that you must price are the Moonroof, Air Conditioning, and Automatic Transmission. The amount that each consumer is willing to pay for each of these options is listed below.
Moonroof Automatic Transmission Air Conditioning
Customer 1 $800 $750 $300
Customer 2 $550 $900 $750
Customer 3 $330 $400 $620
What is your recommendation? If your recommendation is adopted, what options will each customer purchase and how much revenue will Ford earn by selling these options?
Explanation / Answer
As these customers have different values for different version of Ford Fiesta.To maximize revenue and sale product to all these three customers the variants should price according to the wilingness of customers in that segment and maximum revenue Ford can generate for that variant from these customers.
Moonroof should be priced as $800 and Customer 1 will purchase it because he is willing topay $800.
Automatic Transmission be priced as $900 and Customer 2 will purchase it because he is willing to pay $900.
Air Conditioningbe priced as $600 and Customer 3 will purchase it because he is willing to pay $600.
Total revenue Ford will earn=$800+$900+$600=$2,300.
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