The company’s pricing options are captured in Figure 3.3. Suppose a company’scurrent pricing option is the one pictured in the middle column of Figure 3.3. Imaginethat the company decides to pursue strategies to increase the utility of its productoffering from U to U* to boost its profitability. Increasing utility initially raisesproduction costs because the company has to spend money to increase product performance,quality, service, and other factors.
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