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The founder and president of Nuway Software (Nuway) must determine the pricing strategy for their new internally-developed mobile software product, Nulogic. Nuway develops custom mobile software applications that provide great competitive advantage to each of their customers; no two software modules it develops are similar. Nuway is now ready to market Nulogic as a stand-alone product and has identified three unique customer segments: Corporate in-house developers, competitors and independent software developers. The company has historically followed a cost-plus pricing model and has maintained positive profit margins. The software industry as a whole is moving towards value-based pricing, where cost is based on perceived value to the customer. The president does not favour value-based pricing and views it as price-gouging; however, he is aware that cost-plus pricing has limitations with regards to cost accuracy. By considering the entire software industry, Nuway's capabilities and his own preferences, the president must determine how to price the new software.
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Canada, Small, 2008
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