The Production And Pricing Strategy Essay

1357 Words Dec 6th, 2015 null Page
• Based on our period 4 decisions, our net contribution increased to $790,000 however, we were at the fourth place in the market. We still left money on the table and our overall share of the market dropped.
• With reasonable product pricing and specification, we were hitting the market need, however we quickly found out that our sales force needs to be realigned to support our production and pricing strategy. The market continued to grow and our sales force was grossly overworked in both Channels. We decided to hire 2 additional sales people, one for each Channel. Sales commission was increased to 8% to push further sales, and the percentage of non-selling time in Channel 2 was increased to 15%.
• The features remained the same except for number of special commands. We decided to increase the special commands of our product. The production quantity remained at 37,000 since we did not produce the full amount last period. Our reasoning for this was that the market is expected to increase.
• We continued to increase our wholesale price and got aggressive in Channel 1, increasing to $160. This was to try and increase our margins, but still undercut our direct competitor. Advertising was cut to $289,000 for the sake of making the budget.
• Sales promotions were split evenly between Channel 1 and Channel 2. This means we have had a slight departure from our initial plan to focus on Channel 1. We want to try and pick up some of the sales from the creators…

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