Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $64. Each of the high-value consumers buys one doll and two accessories and is willing to pay $125 in total.
Mattel is currently considering two pricing strategies:
Strategy 1: Sell each doll for $32 and each accessory for $32
Strategy 2: Sell each doll for $3 and each accessory for $61
In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy.
Revenue from Low-Value Customers
Revenue from High-Value Customers
Total Revenue from Strategy
$64 Value, 1 Accessory
$125 Value, 2 Accessories
$32 doll + $32 accessory
$3 doll + $61 accessory
The strategy that generates the most revenue is strategy ?
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”