Team Member Guide

Marketing is concerned with pricing, promotion budgets, sales budgets and sales forecasts.

4.2.1 Pricing Sensors

Price was discussed in 3.1.2 Pricing. To review, appeal falls to zero when prices go $5.00 above the expected price range. Price drives the product's contribution to profit margin. Dropping the price increases appeal but reduces profit per unit.

Segment price ranges fall at a rate of $0.50 per year. For example, in Round 0, Traditional customers expected a price between $20.00 and $30.00. In Round 1, the Traditional price range will be $19.50-$29.50; Round 2, $19.00-$29.00, etc. This puts pressure on companies to improve their cost structures.