Ty it 7: You develop a new self-cleaning toilet.Production costs are 200 Fixed costs add another 50 You want to make 45 per toilet. So you decide to sell the toilet for 295 Pricing strategy: You soon realize that customers don't understand how this toilet works You hold focus groups and surveys to discover that customers just want a sanitary toilet. They want the lid always to be clean and no ring inside the toilet. You revamp your product and, through this information, realize that you can sell your toilet for around 1000 You price test it at Home Depot for 999 and find that you sell out. So then you price test at 1499 and still see sales going reasonably well. You then price it at 1999 and only sell one unit. You decide to keep it at 1499 Pricing Strategy: After selling this self -cleaning toilet for two years, you decide to add a feature that allows customers to have lights under the rim that are motion sensor activated. Perfect at night.You want to be the first in the market to sell this new add-on kit and want to stop competition from entering your arena You decide to offer it at an introductory price of 99. The actual value of this new feature is over 200 You work with Home Depot to produce a unique display offering this introductory pricing for one month. Pricing Strategy:

To determine the optimal pricing strategy for the self-cleaning toilet with the added feature of motion sensor-activated lights under the rim, we need to consider several factors:<br /><br />1. **Cost Analysis**: Calculate the total cost of producing the toilet with the new feature.<br />2. **Market Analysis**: Understand the willingness of customers to pay for the additional feature.<br />3. **Competitive Analysis**: Assess the pricing strategies of competitors offering similar features.<br />4. **Customer Perceived Value**: Determine how much value customers place on the new feature.<br /><br />### Step-by-Step Pricing Strategy:<br /><br />#### 1. Cost Analysis<br />- **Production Cost**: The cost of producing the self-cleaning toilet is $200.<br />- **Fixed Costs**: Additional fixed costs are $50.<br />- **Total Cost**: $200 (production) + $50 (fixed) = $250.<br /><br />#### 2. Market Analysis<br />- **Initial Pricing**: The initial price for the self-cleaning toilet was $295.<br />- **Revamped Price**: After realizing the value customers place on cleanliness and no ring inside, the price was increased to $1000.<br />- **Price Testing**: Testing at $999 and $1499 showed reasonable sales at $1499.<br /><br />#### 3. Competitive Analysis<br />- **Market Position**: You want to be the first in the market with the new feature.<br />- **Competitive Pricing**: Research competitors' pricing for similar features. If competitors are offering similar features at $999, you need to consider how to differentiate your product.<br /><br />#### 4. Customer Perceived Value<br />- **Value of Feature**: Customers value the self-cleaning feature highly, as evidenced by the willingness to pay $1000.<br />- **Additional Value**: The motion sensor-activated lights add further value, especially for nighttime use.<br /><br />### Final Pricing Strategy<br />Given the high perceived value of the self-cleaning feature and the positive response to the price of $1499, introducing the new feature at a premium price makes sense. However, to ensure it is competitive and attractive, consider the following:<br /><br />- **Introductory Offer**: Offer the new feature at a reduced price for the first month to generate buzz and ensure it stands out in the market.<br />- **Standard Price**: After the introductory period, set the standard price at a premium level that reflects the added value of the new feature.<br /><br />### Example Pricing Plan<br />1. **Introductory Offer**: $999 for one month.<br />2. **Standard Price**: $1499 after the introductory period.<br /><br />This strategy ensures that you capture the initial interest and market share while maintaining a competitive edge.