Valeo
An automotive supplier that sold the Park Assist system to VW.
Where Valeo comes up1 book
From Valeo Park Assist case in the book
What was said about Valeo
Valeo priced Park Assist on cost plus and left value with VW. Valeo sold its Park Assist system to VW for about €100 a unit, priced at cost plus margin. VW sold the same system to car buyers for €670.
The book uses this as a case of underpricing, a "minivation". Its warning signs are sellouts, easy target beats, fat channel margins and few price escalations. Its advice is to price on the value created for customers, and to raise an underpriced price in small steps paired with improvements. Quote: "With minivations, failure can masquerade as success."
Monetizing Innovation: How Smart Companies Design the Product Around the Price
It sold Park Assist to VW for about €100 a unit using cost-plus, and VW charged buyers €670.
Valeo priced Park Assist on cost plus and left value with VW. Valeo sold its Park Assist system to VW for about €100 a unit, priced at cost plus margin. VW sold the same system to car buyers for €670.
The book uses this as a case of underpricing, a "minivation". Its warning signs are sellouts, easy target beats, fat channel margins and few price escalations. Its advice is to price on the value created for customers, and to raise an underpriced price in small steps paired with improvements. Quote: "With minivations, failure can masquerade as success."
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