Schimpf Industries Incorporated Has Developed a New Grinder, Model WC-13

question 308

Multiple Choice

Schimpf Industries Incorporated has developed a new grinder, model WC-13, that is designed to offer superior performance to a comparable grinder sold by Schimpf's main competitor. The competing grinder sells for $64,000 and needs to be replaced after 8,900 hours of use. It also requires $17,800 of preventive maintenance during its useful life. Model WC-13's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 35,600 hours of use and it requires $44,500 of preventive maintenance during its useful life.From a value-based pricing standpoint what range of possible prices should Schimpf consider when setting a price for model WC-13?

• A) $64,000 ≤ Value-based price ≤ $282,700
• B) $218,700 ≤ Value-based price ≤ $256,000
• C) $64,000 ≤ Value-based price ≤ $256,000
• D) $218,700 ≤ Value-based price ≤ $282,700

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Definitions:

Brand Promise

is the commitment made by a brand to its customers, representing what customers can consistently expect from the brand's products or services.

Mission

A statement that defines the core purpose and focus of an organization, guiding its decisions and directions.

Price Changes

Adjustments made to the selling price of goods or services in response to market demands, cost of production, or competitive pricing.

Demand

Prospective customers’ desire for the goods and services available.