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MS-192 Switching Costs v05

[Market Simulation] MS-192 Switching Costs
Market Simulation (MS-192) - Switching CostsAfter a Customer selects a Product to buy, their Willingness To Pay (WTP) forall of the other Products in the Category may decrease due to SwitchingCosts. For example, if a Customer invests in the use of a Product then thisinvestment will be lost if the Customer were to switch to a different Product.Switching Costs describe any impediment to a Customer changing suppliers. Competitive Story:In this Market, Spacely Sprockets and Cogswell Cogs are both competing forCustomers. If a Customer selects one vendor then their WTP for the other vendorwill decrease. A Temporary Price Reduction (TPR) may induce that Customer tonevertheless switch to the other vendor, but the switch may not be permanent if thePrice were to rise again. Define the Willingness To Pay(WTP) of Customers for SpacelySprockets and Cogswell Cogs. Step 1: Spacely Sprockets andCogswell Cogs charge Full Price Step 2: Only Spacely Sprocketsoffers a Free Trial Step 3: Both Spacely Sprocketsand Cogswell Cogs charge FullPrice Spacely Sprockets:Step 1 Customers = 1478 *Step 2 Customers = 4528Step 3 Customers = 1879 * Cogswell Cogs:Step 1 Customers = 1450 **Step 2 Customers = 1172Step 3 Customers = 1450 ** Switching Costs only impactCustomers who have bought aProduct - not Customers whohave not yet bought any Product The long-term impact of SpacelySprockets' Free Trial was only tobring in new Customers. NoCogswell Cogs Customers stayswitched to Spacely after the trial.Willingness To PayWTP MatrixSpacely SprocketsCogswell CogsPredictMarket ShareIf Not PurchaseDecrease WTPSpacely SprocketsFree TrialPredict NewMarket ShareIf PurchaseIncrease WTPSpacely and CogswellFull PriceMore CustomersNow PurchaseExclude 'No Sale'ProductsAgain Include'No Sale' Products CustomerDistributions Table Creator Simulate Market Scale Purchased Table Creator Simulate Market Scale Purchased Table Creator Simulate Market Row Splitter Concatenate Market Simulation (MS-192) - Switching CostsAfter a Customer selects a Product to buy, their Willingness To Pay (WTP) forall of the other Products in the Category may decrease due to SwitchingCosts. For example, if a Customer invests in the use of a Product then thisinvestment will be lost if the Customer were to switch to a different Product.Switching Costs describe any impediment to a Customer changing suppliers. Competitive Story:In this Market, Spacely Sprockets and Cogswell Cogs are both competing forCustomers. If a Customer selects one vendor then their WTP for the other vendorwill decrease. A Temporary Price Reduction (TPR) may induce that Customer tonevertheless switch to the other vendor, but the switch may not be permanent if thePrice were to rise again. Define the Willingness To Pay(WTP) of Customers for SpacelySprockets and Cogswell Cogs. Step 1: Spacely Sprockets andCogswell Cogs charge Full Price Step 2: Only Spacely Sprocketsoffers a Free Trial Step 3: Both Spacely Sprocketsand Cogswell Cogs charge FullPrice Spacely Sprockets:Step 1 Customers = 1478 *Step 2 Customers = 4528Step 3 Customers = 1879 * Cogswell Cogs:Step 1 Customers = 1450 **Step 2 Customers = 1172Step 3 Customers = 1450 ** Switching Costs only impactCustomers who have bought aProduct - not Customers whohave not yet bought any Product The long-term impact of SpacelySprockets' Free Trial was only tobring in new Customers. NoCogswell Cogs Customers stayswitched to Spacely after the trial.Willingness To PayWTP MatrixSpacely SprocketsCogswell CogsPredictMarket ShareIf Not PurchaseDecrease WTPSpacely SprocketsFree TrialPredict NewMarket ShareIf PurchaseIncrease WTPSpacely and CogswellFull PriceMore CustomersNow PurchaseExclude 'No Sale'ProductsAgain Include'No Sale' ProductsCustomerDistributions Table Creator Simulate Market Scale Purchased Table Creator Simulate Market Scale Purchased Table Creator Simulate Market Row Splitter Concatenate

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Created by: Berlin
Created at: 2018-11-29
On NodePit since: 2021-02-05
Last update: 2024-11-21
Created with KNIME version: v4.3.0

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