Business, 23.05.2020 19:57 myhomeacc32

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

($)

($)

($)

Strategy 1
$32 doll + $32 accessory
Strategy 2
$3 doll + $61 accessory
The strategy that generates the most revenue is strategy ?

Answers: 2

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