2.2 Competitive Analysis and Pricing
<<
A company needs to understand the competition prior to choosing its
marketing activities / executing on its marketing programs. In particular,
frameworks and theories like SWOT and Game Theory can be utilized as
part of customer targeting, product pricing / price differentiation across the
customer segments.
Typically, if a companion MRD is available for the product, analysis of
various business situations using Game Theory concepts such as Dominant
Strategy, Nash Equilibrium, Max-Min Strategies, Mixed Strategies, Tit-for-
Tat Strategy, etc. should be part of the MRD. Otherwise, that analysis can be
done in this section.
For a high-tech / software product, the simple formula to price products
where marginal revenue equals marginal cost does not necessarily hold true.
To extract the consumer surplus, a firm should price solutions above and
below the price point P
0
in the figure above.
©2006 - 2009 Franteractive Inc. All rights reserved.
Advertisement / Coupons by FranTerActive
