SLP Time Warp 3 - Essay Example

This paper thus attempts an implementation of the suggested theories, and in this way attempts at discovering the most effective strategy that can be used with the three products (Abbing & van Gessel, 2008). Pricing is largely regarded as a viable marketing strategy that the company can pursue. In this regard, the cost at which product X5 is sold needs an increment since the simulation results proved that the product was still in its growth phase and thus has a greater potential for growth before it attains maturity.

On the contrary, the product X7, out of the simulation results, shows that it lies in the pre-growth phase. An increase in its product, though a risky course to take, seems to be the most logical path at the moment in a bid to determine the market reception, as well as acting as a means by which to test its market limits. The third product, the product X6, revealed to be in the maturity phase from the simulation results. Given its relatively impressive market run, it is a wise choice to further push its marginal profit through a slight price increment.

The reason for stressing on slight is to avoid a scenario where it is too highly priced making the cost an issue that makes customers opt for competing brands (Beverland, Napoli & Farrelly, 2010). As a marketing procedure, this final strategy takes the combined strategy approach in achieving optimum product performance in terms of sales generation and profits accrued from these sales. In this regard, an implementation of the simulation results taking into account the initial R & D allocation increment (Bivainiene, 2010).

Increasing the expenditure allocation of the R & D is done through an increase of that of the product X5, a product in its growth phase, as well as in the introductory phase of the product X7. The projected results out of these changes are as shown below: Year 2012 Product Price $ R&D Allocation % Profits X5 265 33 121, 288, 230 X6 420 34 264, 830, 873 X7 230 33 -22, 254, 435 Total 363,864,668 In the succeeding year, the pricing marketing strategy will prove the most logical strategy to be applied.

In this strategy, the prices of products X5 and product X7 are reduced in relative margins. The price of the product X6, is however, left constant without any changes made to it. The rationale behind this direction is because the two products, X5 and X7 are relatively weakly established; the strategy to be applied needs to be focused upon two main issues, the increase in sales volumes, and the quick and efficient penetration of the market to establish its niche amongst the more established products in the same category as them (Slotegraaf & Pauwels, 2008).

The strategies that call for an increase in the expenditure of the R & D are, however, left to continue. The expected profits changes on the application of the price changes and allocation of the R & D are as reflected below: Year 2013 Product Price $ R&D Allocation % Profits X5 240 35 79, 643, 368 X6 420 28 264, 830, 950 X7 180 36 0 Total 344, 474, 318 A thorough application of the strategy is reflective of the continued product success in terms of gaining market ground and penetration. The price reductions were necessary since it is the variable that can be modified as far as the marketing mix is