Essay
Mounger Industrial Products Incorporated has developed a new industrial forklift, model CZ-03, that is designed to offer superior performance to a comparable forklift sold by Mounger's main competitor. The competing forklift sells for $27,000 and needs to be replaced after 1,000 hours of use. It also requires $3,000 of preventive maintenance during its useful life. Model CZ-03's performance capabilities are similar to the competing forklift with two important exceptions-it needs to be replaced only after 4,000 hours of use and it requires $6,000 of preventive maintenance during its useful life.
Required:
From a value-based pricing standpoint what is the differentiation value offered by model CZ-03 relative to the competitor's forklift for each 4,000 hours of usage?
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