Within each segment’s price guidelines, appeal for a product follows a classic economic demand curve: as price goes down, appeal goes up (Figure 5.7).

Figure 5.7 Classic Price Demand Curve: As price drops appeal rises.

Sensors priced $1.00 above or below the segment guideline lose about 20% of their appeal to customers. Products continue to lose approximately 20% of their appeal for each dollar above or below the guideline, on up to $5.00, at which point they lose all appeal.

Reliability In The Fine Cut

Customers prefer high MTBF ratings to low ones. However, if a product’s MTBF is beyond the expected range, customers ignore the additional reliability.

Sensors with an MTBF 1,000 hours below the segment guideline lose about 20% of their appeal. Products continue to lose approximately 20% of their appeal for every 1,000 hours below the guideline, on up to 5,000 hours, at which point they lose all appeal to customers.