your other products/ services Use to: Minimize internal cannibalization Maximize external cannibalization Predicted Market share Price of my product $400 $600 $800 $1000 $1200 My Product Company X Company Y Current price of my product Company Y’s product is not much affected by price changes of my product. Means it is not seen as a viable alternative by the market Company X’s product is affected by price changes of my product, but only strongly so if price is close to $1000 or higher. Means I can increase my price to $950 without significant loss of market share.
enterprise SaaS software Wanted to launch a SMB SasS software product Competition in the SMB marketplace consisted of internet security appliances Market leader Charter: Find optimal price for a new SMB offering Minimize internal cannibalization Maximize external cannibalization
competitors at different prices of the new SMB offering When SMB offering has lower price, Competitor 1 will lose substantial revenues Change in market share -50% -40% -30% -20% -10% 0% Price of new SMB offering $10 $15 $20 $25 $30 $35 $40 $45 $50 Competitor 1 Competitor 3 Competitor 3
$0k $20k $40k $60k $80k $100k $10 $15 $20 $25 $30 $35 $40 $45 $50 Revenue Delta (including cannibalization) Overall Revenues New SMB Offering Price Project Monthly Revenue x 10000 Revenue Max = $35 Price Revenue Neutral - Hurt Competition = $15 Price Company has two choices: Price the new SMB product for max revenues at $35/month/user. Or, Price at $15/month/user. To be revenue neutral, but hurt Competitor One. Company decided to price at $15/month/user. Already financially weak Competitor One filed for Ch.11 bankruptcy after approximately nine months. Client acquired Competitor One. Increased pice to $35/month/ user by launching new version.
psjofors
mercari_inc
ozakiomumkj
ggfs
so_kotani
gpol
attelu
behealthy
tsogo817421
nessu_inc
hansodeeeeee
kaonavi
nakahara
danielanewman
keavy
katiecoart
rkaga
akademiya2063
kastner
maltzj
brad_frost
sachag
portentint
hannesfritz
lemiorhan
