Problem 3 (40 points) Consider the following product: Netflix streaming subscription. Assume that you are the pricing manager and are tasked with setting a pricing policy (NOT actual prices) for the monthly subscriptions. You know the following things about the product: . . . You do compete with other services (Hulu, Amazon Prime, Cable, etc) You are setting the price per month but keep in mind that customers keep the product longer than a single month You collect age, name, email address, and billing information from customers at the time of purchase (but you are allowed to ask other questions at the time of purchase) The only "versioning that you currently offer is how many devices can be concurrently logged on to a single account (it is either 1, 5 or unlimited) You have no real capacity (or assume your current setup can handle any level of projected demand - you have a trivial marginal cost) Sales occur online and over the phone Detail a pricing policy (NOT SPECIFIC PRICES) that specifies the following things: What kinds of segments will you create - where a segment is a group of customers who get charged a particular monthly price. Be specific about the dimensions along which you segment customer types this could be based on product version, channel of sale, or some specific attribute of the customer. You will be graded based on how appropriate the dimensions are, whether or not you can effectively segment customers into these groups and whether or not there is real justification for charging different prices based on cost to provide or willingness to pay of a. the groups. b. For each dimension that you list, explain in one sentence how you think it will be perceived by customers (e.g., will they find it fair? Can you justify to customers why they would be charged differently?) c. For each dimension that you list, create a rank order of prices from highest to lowest (e.g., if product version is one dimension, specify which version will be charged the most to the least, if you have another dimension, do the same) d. How many distinct prices will this lead to? Comment on any issues you think you will have in implementing the policy (e.g., could this anger customers? Do you think you will lose any customers to competitors? Do you think you will have problems with cannibalization?) e