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If the proposed upgrade (p. 524) was in place and all products on market are all potentially upgradable to 30 seats with the cost-price information as shown in Table 2. Please answer the following questions (1-3) with the following consideration (A-C).
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B. The pricing for the upgrades must not undercut the existing pricing for the 30-seat QTX server.
C. Clearwater wanted to motivate buyers to purchase the maximum number of seats at the initial purchase.
1. Does Option 1 (The Product Manager’s proposed $8,000 20-seat upgrade price) make sense? Why?
2. What is the price bottom and price ceiling for upgrading with extra 20 seats (from 10 to 30 seats)? Why?
3. If Clearwater looks for a price that generated margin indifference between buying an additional 20-seat box or a 20-seat upgrade, what should be the price be? Show the details please.