I was given this case and struggled quite a bit with it. I was wondering how you would approach a pricing question such as this one. Other similar ones might be:
Why is Amazon prime / Netflix / YouTube Red priced the way it is?
Seems like a standard pricing question. Answers could focus on:
- Value to the consumer (most likely the right / relevant answer since it will allow for price differentiation between various categories of consumers)
- Cost+ model, how much it cost to develop + some margin
- BATNA
...
PS: Other considerations include psychological impact of various price points, as well as one-off upfront fee vs. a monthly charge vs. "free installation, pay for the upgrade" -> cf. gaming industry.
Hope this helps
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