Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who
Question:
Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $76. Each of the high-value consumers buys one doll and two accessories and is willing to pay $147 in total.Mattel is currently considering two pricing strategies:
• | Strategy 1: Sell each doll for $38 and each accessory for $38 |
• | Strategy 2: Sell each doll for $5 and each accessory for $71 |
In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy.
Revenue from Low-Value Customers | Revenue from High-Value Customers | Total Revenue from Strategy | |
---|---|---|---|
$76 Value, 1 Accessory | $147 Value, 2 Accessories | ($) | |
($) | ($) | ||
Strategy 1 | |||
$38 doll + $38 accessory | |||
Strategy 2 | |||
$5 doll + $71 accessory |
|
International Business The New Realities
ISBN: 978-0134324838
4th edition
Authors: Tamer Cavusgil, Gary Knight, John Riesenberger