What price point should the golf course be indifferent

Assignment Help Marketing Management

Reference no: EM133343059

Question: Bill Murray, E-Z-Go's golf cart sales rep for Northern IN, is going to meet with the team that manages Warren Golf Course. His plan is to convince them to switch its fleet of golf carts from Yamaha to EZ-Go. He knows his success will largely be determined by the price he quotes. First, Bill knows the the golf course plans to keep any new fleet of golf carts for 5 years, for a total of 10,000 operating hours. Whenever the fleet is not fully available, Warren's mgt team estimates it costs the course $50,000 in lost profits (Assume the golf course will only incur this loss for the 1st fleet-wide failure, and that the manufacturer will reimburse Warren for lost profits due to subsequent failures). A fleet of 20 new Yamaha golf carts is priced at $60,000. When electricity and maintenance costs are factored in, the Yamaha fleet will cost $10/hr to operate. The probability of the Yamaha fleet being unavailable at some point during the 10,000 operating hours is 75%. By contrast, an EZ Go fleet costs $11/hr to operate, but the probability of a fleet wide failure is only 5%. At what price point should the golf course be indifferent to a fleet of 20 new EZ golf carts

TEV = (price of the next-best alternative) + (value of the performance differential)

Reference no: EM133343059

Questions Cloud

Review your previous creative strategy : creativity of this brief and completion of this brief that connects to their company, they will decide to hire you for this project and many other ones with

Top place on planet earth to watch a movie : Top place on planet earth to watch a movie," it is using exploitation. niche marketing. puffery. deceptive advertising. unfair advertising

Create one search and one display ad geared towards : Create one search and one display ad geared towards achieving your marketing goals and considering your keyword research (please provide screenshots)

Did wendys twitter campaign increase the company sale : Did Wendys Twitter campaign increase the company's sales and profits? Use the customer journey to speculate about why and how it might or might not have

What price point should the golf course be indifferent : The probability of the Yamaha fleet being unavailable at some point during the 10,000 operating hours is 75%. By contrast, an EZ Go fleet costs $11/hr

Explain the difference between a pool and a compartment : Explain the difference between a pool and a compartment when considering how nutrients cycle through the environment. Simple answer.

Identify five examples of sources of global information : Identify five examples of sources of global information and/or demographics, and what type of information/data can be collected from each of the sources you

Identify who the target audience should be : What secondary data would be useful to identify who the target audience should be for this business and what qualitative research techniques would

How does the organization create value for these customers : Reflect on how organization has succeeded thanks to effective use of marketing and What customers does it serve? Why are they a good fit

User Account

All Pages