Positioning Costs

Positioning cost is computed on a monthly basis, and within the month on a "before and after" basis if a repositioning of a product occurs. If the product sits still, its material cost gradually falls throughout the year. If the product repositions, during the month of the reposition, it has a "before" cost and an "after" cost.

Material Positioning Costs: These costs vary depending on the product’s location on the perceptual map. At the start of Round 1, products placed at the trailing of edge of the Low End segment would have a positioning component cost of $1.00; products placed at the leading edge of the High End segment would have a positioning component cost of $10.00.