The Marketing Decisions for Tablet Development - Essay Example

? Case study Robert Odom TUI Case study This paper analyzes the marketing decisions for Tablet Development based on a simulation model. Bythe use of financial analysis, it explores the relevant and most appropriate strategies to be put in place to maximize on the returns of the businesses latest additional products, the X5, X6, and the X7. Thus, this paper seeks to analyze the company’s pricing strategies, in relation to the three products mentioned, in a bid to maximize profits and returns and make decisions on the feasibility and viability of having the products on the market or whether these should be discontinued (Abbing., & van Gessel, 2008). Strategic position After analysis of the market performance of the products, recommendations for price changes amongst the three products seems the most viable course of action to be taken. In this line, since the market reflected little wavering on the X5 product, its price needs to be kept constant until a well cut out market trend is observable. The market performance of the X6 reflects a steady performance and market dominance in its category. In this view, an increasing in its market price will be a wise step in maximizing its profits. The market performance of the X7, on the other hand, is not as impressive. In a bid to compete favorably with other market brands, it is in order to price it more competitively. In this regard, I would recommend a price reduction as the most workable strategy (Beverland, Napoli, & Farrelly, 2010). A detailed explanation of the decisions is only able to be explained via an in-depth analysis, at the individual level, of the three new products offered by the company, the X5, the X6, and the X7. Product X5 The X5 has had three years run in the market and so far exhibits the lowest cost in pricing amongst the three products offered by the business. This reflects a case of plasticity on the side of the product. This translates in minimal interests in the products performance and hence the customers interest. This focuses the strategy not on an increment of the current market price but rather on the exposure and rebranding of the product so at to make it more profitable. While the current market price of $ 250 seems a reasonably fair market price, it is uncompetitive, not due to in affordability, but the reason may lie on its branding or on other factors that control consumer choices (Bivainiene, 2010). Product X6 Since its market debut 2 years back, the market performance of the product X6 has been relatively impressive. The case of the product can be described as being flat metal. Its smooth market performance is not attributable to its price but rather on the overall usefulness and performance as judged by the customers. The relative stability in the market has made the products price be quoted as $420, a figure that can be raised, albeit by a minimal margin, in a bid to maximize the profits attainable via the use of the product. The risks involved in having a large increase in price are that some customers may be willing to compromise on quality if only to have a cheaper, more affordable product irrespective of its performance. As such, any price increment needs to be done discreetly and with enough consideration to the customer if its continued good performance is to be sustained (Slotegraaf & Pauwels, 2008). Product X7 Given that the product is relatively new in the market; its market reviews may not be concrete enough from which to draw conclusive findings. The case for this product can thus be described as colored, in contrast to the plastic case of X5, and the metal case associated with X6. The relative immobility of this product in the market is attributable by hesitant customers who opt for better established products of the same caliber. The un-ease that results is not so much a factor of the price but rather based on the anticipated performance of the product in the market in comparison to the other already established products. The initial price, quoted at an approximate $200 serves as an entry price subject to either rise or fall depending on the prevailing market trends that will govern how competitive it becomes. While all the products have gained significantly in comparison to the previous year, the sales projections still show that there is still a lot to be desired. The significant sales augments were largely contributed by the X6 sales, rising from a figure of $ 205, 523, 278 in 2010 to an approximate $ 491, 132, 541 in 2011. This is an approximate 70% increase in sales. If looked at from the aspect of product performance, X6 has exceeded market expectations while X5 performance reflects just adequate meeting of the projected expectations. The price of this product rose from 245, 566, 271 to 368, 349, 406. The market performance of X7, however, has fallen below per and thus failed to meet expectations (Stuart, 2011). The percentage increase in profits has been substantial, showing a 304% percent increase between the years 2012 and 2015. Out of this, around 55% profit was contributed by product X5, 79% and 46% attributable to products X6 and X7 respectively. Nonetheless, simulation results have depicted a considerable decline, to the tune of 55% by product X7. This is reflective of a 69% decline in profits (Slotegraaf & Pauwels, 2008). In the course of simulation, the R & D values used for the various products were 33% for product X5, 34% for product X6, and 32% for product X7. The simulation anticipates an accumulative profit margin of $ 295, 185, 249. This holds when operating under the assumption that there are no alterations in prices or allocated R & D. Simulation analysis of the three products yielded differential profits per product as listed below: Year 2012 $ 450, 327, 873 for product X5 $ 809, 316, 040 for product X6 $ 10, 103 for product X7 Applying this figures and running a simulation analysis reflects a $ 1, 259,654,016 cumulative profits for the three products. Consequent simulation analysis over the years is as listed below: Year 2013 Product profit $404, 658, 020 for product X5 $820, 352, 833 for product X6 $20, 353 for product X7 Total $1, 225, 031, 206 Year 2014 Product Profit $4, 977, 757 for product X5 $ 87, 294, 744 for product X6 $ 17, 278, 830 for product X7 Total $ 109, 551, 331 Year 2015 Product Profit (-$16, 802, 459) for product X5 $47, 084, 213 product X6 $ 41, 417, 620 for product X7 Total $ 71, 699, 374 The total simulation analysis reflects a total profit margin of $2, 665, 935, 927.   Conclusion The simulation analysis reflects a scenario of doing better than Joe Schmoe. In a bid to boost profits in the years following, constant rebranding and vigorous marketing strategies will play a key role in ensuring the products achieve a reasonable market share. References Abbing, E., & van Gessel, C. (2008). Brand-driven innovation. Design Management Review, 19 (3), 51-58. Beverland, M. B., Napoli, J., & Farrelly, F. (2010). Can all brands innovate in the same way? A typology of brand position and innovation effort. Journal of Product Innovation Management, 27 (1), 33-48. doi:10.1111/j.1540-5885.2009.00698.x Bivainiene, L. (2010). Brand life cycle: Theoretical discourses. Economics & Management, 408-414. Retrieved from EBSCOhost. Slotegraaf, R., & Pauwels, K. (2008). The impact of brand equity and innovation on the long-term effectiveness of promotions. Journal of Marketing Research, 45 (3), 293-306. Stuart, H.J.. (2011). An identity-based approach to the sustainable corporate brand. Corporate Communications: An International Journal, 16 (2), 139 – 149. Read More