Q1 – Q2 Notes
Consequences
We initially chose Workhorse, Traveler and Innovator segments to target based on the total potential
revenue. To look for a relative large difference and to confirm our initial choices, we need to use the
plus or minus 4.11 precision level, based on the % error from our purchased market survey sampling
plan. The results with precision level were similar, except both Traveler and Cost Cutter did not
have a relative large difference.
Based on Price and Demand choosing Workhorse, Innovator and Traveler are the top three
segments, excluding Mercedes, which was recommended to pursue after acquiring R&D technology.
Pursuing the Mercedes segment before you have new R&D technology is difficult, the segment
requires high level technology to create relatively large demand.
I think we should choose Innovator and Workhorse segments with Mercedes being our third
segment after developing R&D.
Benefits and Attributes
• Take the most important benefits desired by each segment and speculate on which
components or services will be necessary to deliver these benefits.
• Develop ladders from benefits to attributes to help determine our brands and to confirm with
segment to use
• Design a brand for each segment
Market Regions
It doesn’t matter if we use the average of all segments and demand or the average of the top segments
and demand, the 4 areas we should target include Chicago, Toronto, Paris and Tokyo. If we choose
Innovator and Workhorse segments, then we should have the most theoretical revenue.
It is important to note, if we chose Cost Cutters and Workhorse, then the target cities change to
Shanghai, Warsaw, Chicago and Paris. However, the theoretical revenue will decrease significantly
Based on everyone’s analysis, we should choose 2 out of the 4 cities to test the market. Tried entering
3 or more cities and got an error alert. I think we should choose Chicago and Paris, since they have
the largest average demand b/w Workhorse and Innovator. In addition, it would be good to try to
separate regions when testing market instead of both being in America’s.
Brands
Complete section after doing ladders and/or QFP. I will use application and customer needs and wants
to do ladders or QFP.
Q3 Notes
Pricing – Q3
For pricing strategy I averaged the price people are willing to pay in each geographic market or region
and compared to top cities or city in the region (Based top city on our analysis we used to determine top
4 cities in Quarter 2). For example, in EMEA, determined the avg price people were willing to pay in
Paris, Warsaw, Johannesburg, and Abu Dabi, and compared to price willing to pay in Paris.
I determine rebate by subtracting the highest calculated selling price from the lowest selling price. For
example, in the Innovator segment for the Americas region, the avg price willing to pay in Chicago and
Toronto was $190 higher than the avg price willing to pay in all of the Americas region.
My thought is hopefully, the higher rebate in the Americas Innovator segment will appeal to cities with
less demand and we will have less people actually completing rebate in cities with higher demand. If
this doesn’t work then we can always remove rebate and come down to our minimum selling price,
which is equal to the average price they are willing to pay in each region.
In EMEA, our Nighthawk brand was chosen as priority even though Paris demand is very similar to
Chicago demand. However, 2 of the top 2 cities win Workhorse segment include Paris and Warsaw. We
should use Dragon brand as priority in Chicago market, plus the top 2 demanding cities in Innovator
segment are in the Americas region.
Based on the price and cost analysis below I entered info into Price and Priority workspace (didn’t save
just copied) for team to see and compare.
Margin % Margin Rebate
Margin after
Rebate
% Margin
after Rebate
1,403 0.87 0 1,403 0.87
1,754 0.91 190 1,564 0.81
1,409 0.87 5 1,404 0.87
1,563 0.81 0 1,563 0.81
1,283 0.79 35 1,248 0.77
1,520 0.79 0 1,520 0.79
1,247 0.77 0 1,247 0.77
1,532 0.79 10 1,522 0.79
Average price for cities in EMEA for Innovator segment equals $3453
Average price for top city in EMEA for Workhorse segment equals $2865
Average price for top city in EMEA for Innovator segment equals $3465
Average price for top 2 cities in Americas for Workhorse segment equals $3021
Average price for top 2 cities in Americas for Innovator segment equals $3687
Average price for cities in Americas for Workhorse segment equals $3027
Average price for cities in Americas for Innovator segment equals $3496
Average price for cities in EMEA for Workhorse segment equals $2901
Brand 100 units 250 units 500 units 1000 units 5000 units
Nighthawk 1,625 1,618 1,615 1,411 1,194
Dragon 1,940 1,933 1,929 1,725 1,499
Cost per Unit
16.25 6.47 3.23 1.41 0.24
Cost per Unit
19.40 7.73 3.86 1.73 0.30
Sales Force
Based on my findings and Lecture suggestions, I added 1 person for support and 4 sales people for the
top priority and 2 sales people for secondary segment in each region. Since each region has 2 cities in
top in demand, then I found it necessary to keep 4 for primary and 2 for secondary segments. See
below for what I suggested in the simulation. Just copied, didn’t save
• We chose to use average price of all cities in each region and subtracted from lowest pricing
willing to pay in the region to get rebate value. Rounded up or down by 5 dollars. This gave us a
pricing score of 100.
Q4 Notes
Brand Management – Q4
I compared our workhorse brand to other brands with a 70 or higher and made small adjustments to
create Nighthawk v2. Even though there were no other brands in workhorse with 70 or greater
score, I modified slightly with intentions of hitting 70 or greater. Increased capacity, added business
graphics, and auto backup system. This will be better than Rise.
Innovator kept the same version, if we can add or modify but keep the same name? Consider
adding mfg. and version 2 if we can’t modify version 1. This will help prevent competition from
jumping us in regions and improve marketing effectiveness.
Marketing Effectiveness – Q4
Improve branding and advertising.
Price – Q4
Keep Nighthawk price the same if the lowest price is in a city we are selling product. If the lowest
price isn’t in a city we are selling, then compare avg cities we are selling in that region and the
lowest price. **Confirm sales offices are restricted to the city.** Anticipating new competitors
entering market with a similar or different brand and keeping current price b/c their cost will
increase and they had higher prices last quarter and a lower score. Do we stay near the average
price in regions with rebate down to lowest price in the region. **Double check demand and brand
ratings and where computers were sold.
Paris I would stay close to price willing to pay and use similar rebate. Americas change to $3020
with $100 rebate. Tokyo stay close to price willing to pay
Not sure if we should change price at all for Innovator, consider keeping same price if we add mfg.
**similar to nighhawk, compare prices again. If we are doing just Chicago and Toronto, then we
need to go up on price to $3700 with $100 rebate. *compare to Q4 competitors prices.
Traveler I would use close to price willing to pay in EMEA ($3250) and Tokyo ($3350), then $3270 in
Americas with $140 dollar rebate.
Sales offices – Q4
I would open up Tokyo and Toronto to capitalize on Innovator and Traveler. Also, think are price
and brand upgrade for workhorse will push us pass competitors.
Increase sales people in Paris and change priority to workhorse, then innovator, then traveler.
Increase sales people in Chicago for Innovator
Future Investment – Q4
Increasing price and lowering rebates will increase denominator, which is needed if we add sales
offices. We can also increase units to $1000 to increase revenue/margin. **Confirm sales offices
only sale in the cities they are located.
Q5 Notes
Created Nighthawk to target both costcutter and workhorse segment. Expecting nighthawk to take lead
in costcutter above version 2 b/c we are removing some of the items rated low for costcutter demand,
so should give higher brand rating. Expect it to be secondary brand in workhorse segment or maybe
even not reach 70. Nighthawk similar to Endeavor, except we added presentation software, since it’s
rated above 100. Expecting it to rise above endeavor and nighthawk 2. Don’t see much competition in
EMEA or APAC yet.
Suggested price for Nighthawk in America for Chicago and Toronto is $2131 and use $130 rebate. This
will undercut competitors pricing before rebate and with rebate equal competitor Endeavor bottom
price. Should help us gain more market share as we enter Toronto market and release brand back into
Chicago. Paris we should sell similar to max price willing to pay and match competitors rebate. This
should provide a cheaper entry price at $1950 with a $50 rebate. Same strategy in Tokyo $2050 with
$50 rebate.
Nighthawk 2 pricing, leave the same in America and EMEA b/c we are lowest prices and expect to gain
more market share as we enter Tokyo and Toronto. Tokyo price I recommend similar strategy as
Nighthawk in Tokyo, maybe a slightly higher price b/c not very much competition, yet. Use $2850 with
$50 rebate.
Dragon I think we should lower our prices to match last quarter emerging competitor Pakainen and use
our prices from Dragon for Dragon v2. So Dragon, lower to $3600 and $100 rebate for Americas and