3.1.2 Pricing

Every segment has a $10.00 price range. Price ranges in all segments drop $0.50 per year.

Segment price expectations correlate with the segment’s position on the Perceptual Map. Segments that demand higher performance and smaller sizes are willing to pay higher prices.

Price ranges for Round 0 (the year prior to Round 1) are published in the Segment Analysis pages of the Capstone Courier.

Price Rough Cut

Sensors priced $5.00 above the segment guidelines will not be considered for purchase. Those products fail the price rough cut.

Sensors priced $1.00 above the segment guidelines lose about 20% of their customer survey score (orange lines, Figure 3.2). Sensors continue to lose approximately 20% of their customer survey score for each dollar above the guideline, on up to $4.99, where the score is reduced by approximately 99%. At $5.00 above the range, demand for the product is zero.

Price Fine Cut

Within each segment’s price range, price scores follow a classic economic demand curve (green bow, Figure 3.2): As price goes down, the price score goes up.