Arewa Textiles Limited having recently just finalized the process of applying a special finish to textiles materials (fabrics for ladies’ dresses (Higher priced material and lower priced material) and upholstery), the company is ready to introduce the product to the market. The company presently enjoys monopoly on the products due to years of quality research works put in the process of production, highly competitive, easily available in commercial order and a secret formula for achieving the special finish on textile materials. Mr. Ahmed Arewa an executive of the company carried out a market survey in Abuja, Lagos and Port Harcourt to determine the anticipated demand and possible selling price of …show more content…
The demand for the product is certain and achievable with less stress though only sustainable for two to three years. It becomes unpredictable subsequently. The market survey reveals that the fabric can be sold for between N260 to N400 per yard, averaging N340 per yard. The fabric appearance is similar to that of the higher price fabric, which makes it impossible to sell both fabrics in the same market at the same time. The production process for the fabric is slower when compared to the higher price fabric, as fewer yards of products are produce within the same period. It is assume that the lower priced fabric market requires lower promotional expenses when compared to the upholstery market.
2. Mr Arewa’s Assistant Problem
Mr Arewa’s Assistant problem in the case is twofold namely: * How to decide which market to solicit between the upholstery and the fabrics for ladies’ dresses.
* How to choose between the higher price fabric and the lower price fabric or combine both market for profitability.
3. Mr Arewa’s Assistant Objective
His objective is to strategically identify a market that will optimize profitability and sustain business.
4. Decision Criteria that will Guide the Decision Alternative that will be chosen to solve