Bellini Robotics Corporation Has Developed a New Robot-Model EM-28-That Has

question 305

Essay

Bellini Robotics Corporation has developed a new robot-model EM-28-that has been designed to outperform a competitor's best-selling robot. The competitor's product has a useful life of 30,000 hours of service, has operating costs that average $1.40 per hour, and sells for $129,000. In contrast, model EM-28 has a useful life of 90,000 hours of service and its operating cost is $0.80 per hour. Bellini has not yet established a selling price for model EM-28.
Required:
From a value-based pricing standpoint:
a. What is the reference value that Bellini should consider when pricing model EM-28?
b. What is the differentiation value offered by model EM-28 relative to the competitor's offering for each 90,000 hours of service?
c. What is model EM-28's economic value to the customer over its 90,000 hour useful life?
d. What range of possible prices should Bellini consider when setting a price for model EM-28?

Understand the concepts and strategies of market segmentation.

Identify different market segmentation types including geographic, demographic, psychographic, and behavioral segmentation.

Explain the process and importance of targeting in marketing strategies.

Understand the concept and components of a value proposition.

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Definitions:

Net Income

The amount of profit left over after all expenses, taxes, and costs have been subtracted from total revenue.

Common Shares

Equity securities that represent ownership in a company and usually carry voting rights.

Business Combination

The process of bringing two or more separate companies together under common control or ownership.

Negative Goodwill

Occurs when the purchase price of a company is less than the fair value of its net assets, often reflecting a bargain purchase.