Cambridge Software

Cambridge Software

1. Write a one-sentence definition of “versioning”?

Versioning is to produce different versions of a product to attract different segments of customers and to price discriminate on the different segments.

2. In principle, does “versioning” require that all consumers’ ranking of the different versions be identical? Provide an example in each case (identical vs. different rankings).

The goal of versioning is to get your customers to sort themselves into groups with different values for your product. You can adjust both the design of the product and its price in order to influence this sorting. With versioning, customers reveal the value they place on information and what they are willing to pay for it.

Versioning does not require that all consumers’ ranking of the different versions to be identical. For example:

a. Identical ranking: Microsoft Office- the higher versions have more programs for the consumer to use.

b. Different rankings: A food blender with the higher versions being more powerful, but not all people like more power for their purpose.

3. Give two real-work examples (ideally, in IT industry) where the firm initially launched the product in just one form (i.e. one version) and later adopted a versioning strategy.

a. Linked in: Linked in initially started with their basic version, which was offered to their members for free. Under this version, members are allowed to receive unlimited requests for introductions, able to send 5 requests for introductions at a time, receive InMails, search the website, and receive 3 maximum weekly alerts. Now, Linked in offers three additional versions for a cost. These additional versions include the Business Plan, Business Premium Plan, and Pro Plan. Each of these plans has additional attributes available for the users who decide to sign up for the service.

b. SurveyMonkey: SurveyMonkey started with the Basic plan, which is free to users. This...