Dominion Motors

Only available on StudyMode
  • Download(s) : 75
  • Published : January 6, 2013
Open Document
Text Preview
A Case study on Dominion
Motor Company
Presented By:
- Aniket Harsh
- Arjun R.K
- Deepa Sundaram
- Kumar Abhishek

Alternative 1: Selling 10 hp motors at the price
of 7 ½ hp motors


Effect on the profit from 10 hp motors

current price of 10 hp

price of 7 1/2 hp

0

5

10

15

20

25

30

35

40

45

Alternative 1 (Contd.)


Total operating cost per motor to
customer including electricity charges:
Competitor 7 1/2 hp

DMC 10 hp

0

500

1000

1500

2000

2500

3000

3500

4000



Benefits:

-

Counters immediate loss of customers.
If aggressively marketed, will prevent loss to Dominion.



Cons:

-

Short term solution.
Increase Operating cost per motor for the client by a
substantial 18%.
Will lead to eventual if not immediate loss of
customers.
Reduce company profits.

-

Alternative 2: Modifying 7 ½ motor to
increase torque

-


-

Benefits:
Will provide a ready product to put forth to meet
competition.
No additional capital investment.
Lesser time for development
Lower operating cost for customer.
Cons:
Not conducive to the health of the motor market on
the whole.
Might lead to safety and performance issues
irreparably damaging brand value and customer trust.
Reluctance in customers towards using nonstandardized products.

Alternative 3: Coming up with a 5 hp motor
that satisfies the torque requirements.


Total sales considering 60% market capture and 80% of
motors being sold are the new 5hp motors. (Total
market= 1000 motors per year)
600000
500000
400000

300000

Total Sales
Total Cost

200000
100000
0
5 hp

10 hp

( 10 hp motors being sold at 7 1/2 hp price with 50% market capture and 80% motors being sold are of 10 hp)



Total Cost to customer for purchasing and operating
the 5 hp motor versus competitor’s 7 ½ hp motor.

Competitor 7 1/2 hp motor

DMC 5 hp motor

2300 2400 2500 2600 2700 2800 2900 3000



-

-

Benefits:
Will provide market superiority and increased market
share.
Satisfied customers.
Value addition in terms of increased respect for
demonstrating agility and customer need sensitivity.
Cons:
Product will not be ready in time to capitalize on the
start of the season boom.
Loss of customer base in the intervening period.
Loss of brand respect for being ranked behind
competitors.

Alternative 4: Challenging Bridge’s findings


Benefits:

-

If DMC’s testing results prove the fallibility of the
premise for ranking, it will restore customer confidence
and reassure them that they are getting the best of
products.



Cons:

- Unproductive. Loss in customer base, sales and profits in
all genres of DMC products.

Solution (The Fifith Alternative):











Reduce selling price of 10 hp motors to that of 7 ½ hp motors. Simultaneously begin development of 5 hp motor having torque equivalent to 10 hp motors.
Assign the marketing team to reach out to rig supervisors and engage with them to promote the 10 hp motors at reduced selling price and at the same time spread information regarding 5 hp specialty motor which will be shortly available.

Engage top management of Hamilton to present the features of the motor under development. Offer them a one time introductory price of 1045$ on pre-booking of the new motor.
If possible, get backing from NEMA for the performance of the 7 ½ hp motor and communicate it through proper channels to customers for reassuring them.
Parallely conduct testings to challenge the premise of rank awarded. If successful, it will reaffirm customer belief in DMC products and assure them that they are buying from the best.

tracking img