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 at a conclusion on price?
Please solve it.
From India, Aligarh
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1(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 at a conclusion on price?
Please solve it.
From India, Aligarh
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Pricing can be determined by considering the following factors:
Manufacturing Cost + Profit Margins as per Product Life Cycle (PLC)
Fixed Asset Recovery Margins
Comparative Pricing to Closest Substitute
Product Life Cycle (PLC): Introduction, Growth, Maturity, Decline
New Market Segments
Regarding the product's lifespan (1000 years), this feature or attribute can be utilized to enhance sales through extensive advertising.
From Kuwait, Salmiya
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Manufacturing Cost + Profit Margins as per Product Life Cycle (PLC)
Fixed Asset Recovery Margins
Comparative Pricing to Closest Substitute
Product Life Cycle (PLC): Introduction, Growth, Maturity, Decline
New Market Segments
Regarding the product's lifespan (1000 years), this feature or attribute can be utilized to enhance sales through extensive advertising.
From Kuwait, Salmiya
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In the absence of consumption and fitting, direct or replacement usability details: Who will benefit for 1000 years - Government, Industry, Corporates, MNCs, TNCs, so the focus should mainly be here. Even if a company closes, it can still recover at least from the bulb by reselling it.
You and I may die at least around 50 (+/- 50) years! So, how will it hold value if I 'Will' it to my heirs and what is the holder/bulb damage probability? Ordinary consumers will opt for lesser-priced ones that last long enough.
Therefore, prices should be set at 5-10 times higher based on frills and design compared to the costliest one of the same wattage to sustain the Product Life Cycle investment and factor in reaping before competition introduces something cheaper.
From India, Madras
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You and I may die at least around 50 (+/- 50) years! So, how will it hold value if I 'Will' it to my heirs and what is the holder/bulb damage probability? Ordinary consumers will opt for lesser-priced ones that last long enough.
Therefore, prices should be set at 5-10 times higher based on frills and design compared to the costliest one of the same wattage to sustain the Product Life Cycle investment and factor in reaping before competition introduces something cheaper.
From India, Madras
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Price can be fixed based on the points mentioned below:
1. Durability
2. Price comparison with competitors
3. Manufacturing cost
4. Promotion cost
Durability or reliability features can be used to attract consumers.
Regards,
Shahzor
From India, Hyderabad
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1. Durability
2. Price comparison with competitors
3. Manufacturing cost
4. Promotion cost
Durability or reliability features can be used to attract consumers.
Regards,
Shahzor
From India, Hyderabad
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Hi,
Pricing will be determined by considering the investment made to produce each bulb and sell it in the market. The company will only receive a one-time profit from sales. For example, if a truck of 20,000 bulbs is sold, the company will receive the net or gross amount only once, and there will be no additional payments.
The product can be priced moderately to increase sales. However, if it lasts long, the sales of bulbs may decrease, providing Wipro with a competitive advantage.
Regards,
Samarth
From India, Rajkot
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Pricing will be determined by considering the investment made to produce each bulb and sell it in the market. The company will only receive a one-time profit from sales. For example, if a truck of 20,000 bulbs is sold, the company will receive the net or gross amount only once, and there will be no additional payments.
The product can be priced moderately to increase sales. However, if it lasts long, the sales of bulbs may decrease, providing Wipro with a competitive advantage.
Regards,
Samarth
From India, Rajkot
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It would depend a lot on the risk of the product getting copied! Sometimes there can be a first-mover disadvantage as well! Besides the above factor, the cost of the bulb for a time period in a consumer's life has to be taken into account. There will be security issues that crop up, as bulbs are often stolen from public places! If the 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!
From India, Guwahati
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From India, Guwahati
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Hi,
Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will go for Wipro bulbs and think about those who are planning to start a business unit. I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, so there is no one to compete.
(Maybe my mistake with the decrease in sales; I meant other companies.)
Regards,
Samarth
From India, Rajkot
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Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will go for Wipro bulbs and think about those who are planning to start a business unit. I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, so there is no one to compete.
(Maybe my mistake with the decrease in sales; I meant other companies.)
Regards,
Samarth
From India, Rajkot
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Hi,
Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, with whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will opt for Wipro bulbs. When people are planning to start a business unit, I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, leaving no one to compete.
{Maybe my mistake with the decrease in sales meant of other companies}
Please do suggest if I am wrong anywhere. I appreciate your reply. Thanks.
Regards,
samarth
From India, Rajkot
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Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, with whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will opt for Wipro bulbs. When people are planning to start a business unit, I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, leaving no one to compete.
{Maybe my mistake with the decrease in sales meant of other companies}
Please do suggest if I am wrong anywhere. I appreciate your reply. Thanks.
Regards,
samarth
From India, Rajkot
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While pricing one product, we need to consider some aspects like:
1. Cost of Manufacturing & Cost of Machinery for Data.
2. Location Charges.
3. Human resources.
4. This is like teamwork & an expensive endeavor.
If the bulb does not burn out, it means the sale will happen only the first time, and that first time is the last time for the sale of that product. After a decline in sales of a particular product, we need to consider all aspects and design based on market standards.
When pricing the product, we need to consider all aspects and price according to the standards to generate profits, which is the wealth of the organization.
From India, Bangalore
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1. Cost of Manufacturing & Cost of Machinery for Data.
2. Location Charges.
3. Human resources.
4. This is like teamwork & an expensive endeavor.
If the bulb does not burn out, it means the sale will happen only the first time, and that first time is the last time for the sale of that product. After a decline in sales of a particular product, we need to consider all aspects and design based on market standards.
When pricing the product, we need to consider all aspects and price according to the standards to generate profits, which is the wealth of the organization.
From India, Bangalore
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