1)Before introducing its inkjet printers, did H-P have to estimate the demand curve for them? Why or why not?
In 1984 HP came up with first Inkjet Printer, which was quite far from the perfect to be a complete knock-out. HP was not only the inventor of the Inkjet printer it was as well the manufacturer of the low cost inkjet printers. Before HP has launched its Inkjet printers there were no market existed for it as dot-matrix printers were the market leaders and consumers barely had any idea of Inkjet printers. There were basically existed no way to determine how consumers are going to react to these new Inkjet printers. But at the same time the new printers have many advantages over the existing Dot-matrix printers like advanced technology, low price etc. HP by their market analysis, consumer surveys, research became quite confident over the success of its new Inkjet printers which were surely going to replace old leader i.e. Dot-matrix printers.
Despite of having economies of scale HP could have chosen Direct Methods of Demand Estimation, like;
oConsumer Interviews, by taking a representative sample of consumers briefing them about the new product and taking their opinion & views over it. oMarket studies can be the second idea for Demand Estimation, which was chosen by HP and it has shown serious flaws of dot matrix printers like poor print quality and color, at the same time it has also shown their marketing strategies etc. oExperiments performed in laboratory or field without going to the real market could have also been used for estimating the demand of Inkjet printers.
Above mentioned techniques would yield fairly positive results and given HP more confidence to launch its new product to the mass market.
2)When studying Epson before going after the Japanese dominated dot-matrix market, did H-P try to determine which factors would have an important influence on the demand curve for its product? If so, what factors seemed to be particularly important.
In the year 1984 HP has first invented its Thermal Inkjet Printer but it was not of that quality to meet consumers’ expectation. But HP continued to improve and produce its Low – cost Inkjet Printers. It has also introduced a series of expensive laser printers by using “learn from Japanese” policy it continued to build family of product. In 1988 HP introduced its first Deskjet, the plain paper printer but it was not meeting expected sale targets. In 1989 HP started its research, surveys etc. to look into the factors which would have importance influence on demand of its product, though it was not possible to assume a demand curve. Following findings gave HP more opportunities to make its product a knockout and leader;
The market leader Dot-Matrix printer had serious flaws like poor print quality and color. Epson – the market leader in Dot – matrix printer, its marketers intended to customer’s attention and advertise it at the same time for this they got stores to keep their printers at most prominent spots. Epson used tactical weapons like price cut to fend off challenges and it has an influence on market demand by reducing prices as required by business strategy. Consumers liked Epson printers for their reliability.
Epson printers were easy to manufacture and they got huge mileage out of the same product by creating a broad line consisting of variations of the same basic printer.
After learning the current market, technology and consumer behavior, HP responded to these in following manner:
HP engineers created a completely new Inkjet color printer which was simpler and less sophisticated to suit the needs of mass market. This was done after finding Epson’s less complex manufacturing technology which appealed to the consumers as well as to produce a low cost printer. HP marketers demanded stores to put their printers...