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Advanced Improvisation - Lesson 3 (T)
1.
SkimaTalk Official Course Advanced Improvisation – Business Problems Lesson 3: Pricing a New Product
2.
Story: Pricing a New Product 2 XYZ Industries is launching a new high end television. This will be the only television on the market with an indestructible glass screen. XYZ makes quality TV’s, but is not viewed as “best in class”. Existing TV’s in this class range in price from $1,500 - $3,000. XYZ: price
= ??? Low picture quality Minimal features High picture quality Lots of new features TV 1: $1,500 TV 2: $2,000 TV 3: $3,000 Competitive Landscape Teacher Instructions: Ask the student to read the story out loud, then discuss the questions on the next page.
3.
Task 1 3 1. If your goal was to sell lots of televisions (market share), how would you price this product? Why? 2. If your goal was to sell this TV as “best in class”, how would you price this product? Why? 3.
Is there any additional information that would help you decide how to price this product? Questions Teacher version only
4.
Task 2 4 Additional Information: For XYZ Industries, the goal is to establish its TV as the “best value for the money” in its class. The Company will also be launching a slightly lower quality TV price at $1,800. Teacher version only Follow-up Questions 1. Based on this new information,
what do you think is the correct price point for the TV? Why? 2. Can you make an argument to support a $3,000 price point? Teacher Instructions: 1. Tell the student that you are going to reveal some additional information for the story. 2. Read the additional information to the student. 3. Discuss the follow-up questions.
5.
Task 3 5 Teacher version only In order to set the price of a product, you need to understand the strategy behind that product. A company that is pursuing a market share strategy should select a different price than a company that is marketing its product as “best in class”. 1.
Can you name a couple products that are priced for a market share strategy? 2. Can you name a couple products that are priced as “best in class”? 3. Over time, why do you think the price of televisions decreases? Discussion Teacher Instructions: 1. Read the first paragraph and then discuss the questions. Q1 Examples: Amazon Prime, low-cost airlines, Netflix. Q2 Examples: iPhone, BMW cars, Ritz Carlton hotels.
6.
6 End of Lesson We Hope You Enjoyed It! © 2016 SkimaTalk, Inc.
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