Case Study
ABC Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm’s primary distribution strategy is to sell in large volumes to office supply stores and large discount
chains. Mr. XYZ, CEO of ABC Inc. had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater number of markets.

1. In starting out with a market-penetration pricing strategy at ABC Inc., what assumptions
could be made about the market(s), it was serving?
2. Why might have Mr. XYZ avoided using market-skimming pricing at ABC Inc.?
3. How could optional product pricing be used by ABC Inc.?
4. How might product line pricing be initiated at ABC Inc.?
5. If ABC Inc., decided to introduce its products internationally, what factors may impact a
change in price?
6. Explain how product-form pricing may be a pricing option at ABC Inc.,
7. Would quantity discounts be possible for ABC Inc., to offer? Why?

wyasser wrote:

QUOTE:
Case Study
ABC Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm’s primary distribution strategy is to sell in large volumes to office supply stores and large discount
chains. Mr. XYZ, CEO of ABC Inc. had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater number of markets.

1. In starting out with a market-penetration pricing strategy at ABC Inc., what assumptions
could be made about the market(s), it was serving?
2. Why might have Mr. XYZ avoided using market-skimming pricing at ABC Inc.?
3. How could optional product pricing be used by ABC Inc.?
4. How might product line pricing be initiated at ABC Inc.?
5. If ABC Inc., decided to introduce its products internationally, what factors may impact a
change in price?
6. Explain how product-form pricing may be a pricing option at ABC Inc.,
7. Would quantity discounts be possible for ABC Inc., to offer? Why?

Hi ,

1. In starting out with a market-penetration pricing strategy at ABC Inc., what assumptions
could be made about the market(s), it was serving?
Ans:

The company may be playing in a monopolistic market where they have
>> There are many producers and many consumers in a given market
>> Consumers perceive that there are non-price differences among the competitors' products.
>> Few entrybarriers and exit barriers.

They may be hving large number of players playing .

2. Why might have Mr. XYZ avoided using market-skimming pricing at ABC Inc.?
Ans: As the company is playing in a monopolistic market the prices are market determined coz there are many players and they can not cut on cost untill tey are some one like "China"

3. How could optional product pricing be used by ABC Inc.?
Ans: The company might provide opptional products along. say- Diary (with a calender) which involves cost of both these products. Simmilar kinna products that go with each other. Say you club a calander with a diery where calander costs 1$ Diery for 10 $ so you sell both these for say 12 $ .

cheers !

This is a clear case of a product/brand with no clear differentiation and with less advertising budget. When you are a ?me too? products with no value differentiation many marketers end up with price differentiator (for the launch) which is a disaster for the brand from the word go. Having said that BIC disposable razors made a killing by this strategy (read Price differentiator ) but with innovation in packaging , they were the first one to sell disposable razors in pack of 3 ,6 and 12 with a clear product differentiator with the product colour (yellow ) and was a run away success .the good thing to notice here is that there was no real benefit for the consumer apart from price but the same was presented with 3 different industry first price , packaging and product(colour) they took the platform of Disposable

First of all analyze the cost to manufacture and costs like advertisement,marketing and transportation charges . Find Out the cost per product .

1. Find the competitors price per product and their strategy .

2. Study competitors strategy more than your strategy because to find the loop holes from the competitors strategy .

3. the loop holes should become your strength and work on that with perfection agian there should be any loop holes in your strategy also

4. Clearly write up a marketing plan in terms of demographics.

5. Always there is an good thing in the economies of scale .Produce more to cut the cost and for initial stages put profit percentage minimum i.e break even point

6. Reach the market where the competitors are no there

7. Conduct some research before doing all these things like surveys , forum's feedback all these things will add as value for business performance.

8. A variety of products with brands release in the market continiously improve the products for example every month with a new look
9. Tie up with government ,corporations ,banks, schools,colleges and ngo's .for example government is biggest consumer give them a better price with product mix gice competitive price
like this there are many things are there where we can revamp the busienss .Many things has to be analyzed like process cost,production cost,marketing channels and their cost,transportation cost , administrative and operations cost.Business Valuation and Analysis is playing a prominent role in today's business .

Nice arvind..