Titli Case Analysis

Topics: Marketing, Strategic management, Cost Pages: 8 (1993 words) Published: April 14, 2011
Target market:
The potential target is who provides or stay at limited electronic power and space as accommodation. However, from the strategic view point, to establish track record and brand efficiently, our first direct target is dormitory market. After establishing the brand and reliability, we might expand other market collaborating with distributors and manufactures as next step.

College students (Direct beneficiary):
 User benefit statement
Using a MicroFridge, a unit of refrigerator, freezer and 500-watt microwave oven, the customers who have limited electronic power and small space in their accommodations, will enjoy more safe, compact, and convenient cooking in their place. Safety: Newly developed electronic circuitry will pull approximately a half of amps of current of using hot plate with refrigerator which has high risk of getting fire. Compact: only weighing 87 pounds and under 4 feet in height. usually use hot plate which easily gets fire in their dormitory. We assume the reason they don't use microwave oven is that microwave oven is expensive, and take place with refrigerator. College administrators (Indirect beneficiary)

Administrators want to avoid the fire which is caused by hot plate.

Motel manager (Indirect beneficiary)
Managers want to increase their guests. MicroFridge provides the value added service which meets the guest's needs for cooking in motel and might increase the guest. Countries such as Japan, Korea, Hong Kong, which has limited space for accommodation. 2.Price

Cost oriented approach:
Break-even point in wholesale price will be US$ 309: landed price US$ 263 * 15% margin which will cover initial cost (tooling US$170,000, administration US$300,000, and legal cost US$60,000), when we assume we can sell 11,521 units. Needs oriented approach:

Calculate the retail price from the will of additional payment times lifetime of product. In dormitory market, the survey shows that 90% students will pay US$50/year. If the lifetime of the MicroFridge is seven years, to cover the payment from their needs, the retail price should be US$350. This price already covers the break-even whole sales price. In motel market, the survey shows guests want to pay more US$3 for this product. Then assuming yearly occupancy rate is 50%, 160 days, US$3 * 160 days * seven years is US$3,360. This price covers the retail price: wholesale price US$309 * distributor margin 15% and retailer margin 30%. However, we suggest the retail price should be lower than the total price of buying refrigerator and microwave oven.

3.Promotion: In the first direct target, dormitory market, we assume the buyer is college administrators. Their concerns are current problem: fires, needs of students, and the reliability of product: lifetime. Thus we would like to show the survey for needs of students, and also lobby to direct user, college students, to meet their concerns. Furthermore, to meet their concern to reliability, we might to collaborate with big name: well known and experienced manufactures. Or we can provide sample to college to prove the needs of students and products reliability. 4.Place: Selective distribution initially based on order-booking only in select cities and only through company dealerships. To meet the concern of competitiveness of MicroFridge, we suggest planning with consideration in time series. Even though we might protect the product by patent, there still is threat of being copied by big name manufactures. Furthermore we don’t have brand which causes weak bargaining power to distributors, and experience of after services: keeping house accounts. We suggest to start direct sales, which is good for our cash flow problem, to small market, college dormitories which is our main target and relatively easy to dominate and establish our brand. After we had reasonable experience in after services and reputation, we might expand our market collaborating with distributors and...
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