Age Customer age assessments vary from segment to segment
Customer age assessments vary from segment to segment, as shown in Figure 4.6. All other factors held constant, demand is highest when the age is at the ideal. For example, Core customers prefer products that are 2 years old.
4.3.5 Ideal Spots For each segment, customers prefer products placed near the ideal spot, which is a position relative to the segment center (Table 4.6 and Figure 4.7).
4.3.3 MTBF (Mean Time Before Failure) Customers want reliability or MTBF to be within the ranges in Table 4.5. Within the range, the higher the reliability, the higher the demand. However, above the range customers are content and award no additional demand.
As the MTBF moves below minimum expectations, the product loses demand. For every 1,000 hours below the range, demand drops by 16.7%. At 6000 hours below the range, demand falls to zero.
Customers are indifferent to products with MTBFs above
the guideline.
Table 4.5 Segment MTBF Ranges
Minimum Maximum
Thrift 14,000 20,000
Core 16,000 22,000
Nano 18,000 24,000
Elite 20,000 26,000
Figure 4.6 Preferred Ages: Thrift and Core customers seek out proven technology. Thrift prefers products in the three year range and Core in the two year range. Nano and Elite customers demand the latest technology. Nano prefers products in the one year range and Elite wants cutting edge, brand new products.