Wipro Case Study

Business Case Studies
(Please try to be as descriptive as possible)
Q1. Wipro developed a light bulb that never burns out? It could burn for a thousand years.
The director of marketing calls you into his office and asks you "How do we price this
product?" What do you tell him? What are the points you would like to discuss with him for
arriving to a conclusion on price?
PLease Solve it

Pricing can be done considering following factors :
Manufacturing Cost + Profit Margins as per PLC
Fixed Asset Recovery Margins
Comparative Pricing to Closest Substitute
Product Life Cycle [PLC] : (Introduction, Growth, Maturity, Decline)
New Market Segments
With regards to life of the Product (1000 years) this feature or attribute can be used to boost sales by advertising heavily.

In absence of consumption and fitting / direct or replacement usability details:
Who will benefit for 1000 Yrs: Govt / Industry /Corporates/MNC/TNC - so focus mainly here. Copany closed, still recover atleast from the bulb by reselling it!
You and I may die atleast around 50 (+/- 50) yrs! So how will it value if I 'Will' it to my heirs and what is the holder / bulb damage probability? So ordinary consumers will go for lesser priced ones that lasts enough till they do.
So prices: 5-10 Times based on frills and design as compared to the costliest one of same Wattage so as to sustain the PLC investment and factor for reaping b4 competition brings out something cheaper

Price can be fixed based on the points mentioned below:
1. Durability
2. price comparision with competitors
3. Its Manufacturing cost
4. Its Promotion cost
Its durability or reliability feature can be used to attract consumers.
Regards
Shahzor.

Hii
> Pricing will be done taking into consideration the investment done to produce each bulb & getting it sold in the market.....
Because the company will only get a one time profit out of sales {I mean if a truck of 20,000 bulbs is sold then the company will get the net or gross amount only one time & there will be no other payments on it}.
> The product can be sold at a moderate price so the sales will increase but it last long the sale of for bulbs will go down, that will give "wipro" a competitive advantage.
Regards
samarth

It would depend a lot on the risk of the product getting copied!
Sometimes there can be 1st mover disadvantage as well!
Besides, the above factor, the cost of bulb for a time period in a consumer's life has to be taken into account
There will crop up security issues, as bulbs are often stolen from public places!
If mass market is the target it has to be priced economically, with patents and non-sale of similar products by the competitors in the market !

Hii
Let us say that each bulb sold will last for & work at its optimum for 50 years.
> Now if wipro whatever market share it is having sell theses bulbs in the market lasting for 50 years & don't think this type of news will stay down. people will go for wipro bulbs & think about people are planning to start a business unit, i think they will purchase it in bulk which will increase wipro's sale & decrease other companies sale so there is no one to compete.
{May be my mistake with decrease in sales i meant of other companies}
regards
samarth

Hii
Let us say that each bulb sold will last for & work at its optimum for 50 years.
> Now if wipro whatever market share it is having sell theses bulbs in the market lasting for 50 years & don't think this type of news will stay down. people will go for wipro bulbs & think about people are planning to start a business unit, i think they will purchase it in bulk which will increase wipro's sale & decrease other companies sale so there is no one to compete.
{May be my mistake with decrease in sales i meant of other companies}
Please do suggest if i am wrong anywhere. i appreciate your reply. thanks
regards
samarth

While pricing of one product we need to Consider some aspects like
1. Cost of Manufacturing&Cost of MAchinary for Dat.
2.Location Charges.
3.Human resource.
4.This is like team work & Expensive Work.
if the bulb wil nt burn means the sales will happend first time only & the first time is the last time of the sales of that product.
Aftr declining of sales of perticular Product we need to consider all the aspects &would have to design Based on the market standars.
while Pricing the product we need to consider all the aspects & price the standars of getting profilts which is Wealth of organisation.

Marketers will never make such a product where they can not do repeat sales!! Practical! ;)