Cumberland Metal Industries Case Study

902 Words 4 Pages
Introduction
Cumberland Metal Industries (CMI), an enterprise specialized in curled metal products, has developed a new product, metal cushion pads, which assist in the efficiency of pile driving and provide contractors with additional health safety and extended durability. Centered on successful tests, CMI now wants to introduce this new product into the market, with its’ main challenge being how to price its new pads. To aid in making this conclusion, Cumberland should consider several marketing decisions. To begin, CMI must determine an approach for pricing and ultimately, a price for the new pads themself. Second, Cumberland should choose which channels to promote the pads on with the elected pricing strategy and additional support from
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This approach is fundamentally based on the “value consumers are willing to pay for a specific product or service founded on their perception of that product” (Nagle, 20). Perceived value pricing is an important method of pricing, which enables firms to position a product in a way that it will make the product unique. The objective of this pricing strategy is to set the price of the metal cushion pads in a way that “supports and advances the broader marketing objectives of the firm” (Nagle, 125) which employs an aim towards reducing “reliance on the industry [itself]” (Shapiro & Sherman, 2). However, this pricing strategy is contingent on Cumberland Metal Industries procuring a patent on the metal cushion pads to counteract any attempts at copying or imitating this product by other competitors. In short, CMI should not sell its cushion pads unless a patent has been obtained, as it would invite the entry of competitors due to the cushion pads simplicity and ease of …show more content…
Additionally, CMI should apply numerous marketing- mix programs consisting of advertising and specified roles of influencers to communicate and enrich the perceived value in consumer’s minds. With Cumberland Metal cushion pad’s affording prolonged usage, ten times more than asbestos pads (11 ½ inch, $3), speed and efficiency quickly becomes the top priority in the marketing and pricing of this product. Based on the product life, the cushion pad will only have a $30 value
Each CMI pad can cut costs for the contractors and with a patent secured, no other competitor can enter the market with the same product. Due to its unique positioning in the market, Cumberland Metal Industries can charge the monopoly profit maximized price. However, CMI should initially offer a promotional discount of 15% during the introductory phase to encourage influencers to buy the new cushion pad and allow new customers to adopt the new pads, especially when paralleled with the $3 asbestos pads.
Marketing Mix

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