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The goal of the price-setting process is to set profit-maximizing prices by capturing the appropriate amount of differential value in each of the served segments.
Your Product: Tesla’s semi-truck
Select the segments you want to target. What are some possible pricing targets for the electric semi-truck? Use the exhibit as your guide.
| Define Price Window | Set Initial Price | Communicate Prices to Market |
| Set initial price range based on differential value and relevant cost | Determine amount of differential value to be captured with price | Develop communication plan to ensure prices are perceived to be fair |
| Key Questions
– What is the appropriate price ceiling for this product? – How should I incorporate reference prices into my price window? – What is the role of costs in setting my initial price range? |
Key Questions
– Is the price point consistent with my overall business objectives? – What are the non-value related determinants of price sensitivity? – What ere the price-volume tradeoffs and what is their impact on profitability? |
Key Questions
– What is the best approach to communicate price changes to customers? – What are the considerations for implementing significantly higher prices? |
Expert Answer
- The segment that I would be targeting is transportation segment i.e. organizations that take care of delivery of heavy and moderate weighted goods from one geographical location to the other. New companies that have entered in this transportation market would be targeted first and ten veteran players would be approached.
- Market trend for ricing would be studied; the price would be kept a little lower than the existing similar trucks in the market. The price would be kept in the range of $87,000 – $1,15,000.
