HAMILTON - PARTIONING PRICES

Question 1

HYPOTHESES

Answer 1

1. Consumers are more sensitive to the price of low-consumption benefit components
   - > higher benefits > higher WTP > lower price sensitivity
2. Consumers prefer portioning with lower price for low-consumption benefit components & higher price for high-consumption benefit component.
   - > each components gets assessed individually
   - > boundary condition: no charge for low-benefit component

Question 2

MANAGERIAL IMPLICATIONS

Answer 2

• use bundles when price sensitivity varies among customers
• use partioned pricing when price sensitivity is homogenous
• when increasing prices, only high-benefit component price shall be increased
• low benefit components should be priced competitively