CASE STUDY ON PRICING ePrecision Manufacturing Company
In a recent staff meeting, John Winkleman, president of ePrecision Manufacturing Company, addressed his managers with this problem: Intense competitive pressure is beginning to erode our market share in handhelds. I have documented 11 large orders that have been lost to Beckman and Wiston within the past three months. On an annual basis this amounts to nearly 10,000 units and $1.5 million in lost opportunities. Within the last 18 months, at least 16 serious competitors have entered the market. Two thirds of these DMMs have continuity indicators. The trend is the same for European and Japanese markets as well. Our sales of handheld DMMs in fiscal year 20_1 is forecast to grow only 1.7 percent. According to Dataquest projections, the handheld DMM market will grow 20.9 percent for the next five years. I think that figure is conservative. Our competitors are gaining attention and sales with added features, particularly at the present time with continuity indicators. Since a new el'recision general-purpose, low-cost handheld is two years from introduction, it is important that something be done to retain the profitable position of market leader in our traditional direct and distributor channels. Next meeting I want s?me ideas. I ,
The ePrecision Manufacturing Company is a major electronics manufacturer in the Northwest of USA, producing many varied products. The three products that most concern Mr. Winkleman are the Series A handheld digital multi meters (DMMs). As an innovator in the field of handheld DMMS, Mr. Winkleman saw his business flourish over the last two years. But now, with his three most successful products in late stages of maturity and a recession in _ full swing, times are not looking as rosy. The three multimeters of concern are model numbers 1010, 1020, and 1030. These three models form a complementary family line. The 1010 is a low-cost unit containing all standard measurement functions...
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