Reference no: EM13822300
Rachel Myers was in the process of finalization her plans for the upcoming year. As general manager of the Plasticizer Division, she needed to establish the marketing strategy for each of the four main product groups. Three of the product lines were reasonably straight forward since the Division was the major player with only a few small competitors. The fourth product line, the alkyds, posed a rather more difficult problem.
“The product line consistent of three grades and is sold in 44 gallon drums. Last year, grade A material (the top grade) sold for $385 per drum and cost us about $276 to produce. Since then, raw material costs have gone up sustainlly and I estimate that it will cost closer to $305 to produce on the coming year….an increase of $29. So my initial thought was to increase the price to $404 per drum.
Then Pinkney-Ross our largest domestic competitor, announced that they were reducing their price from $390 to $320. Within days, one of the smaller domestic firms, Pikken, announced that they would also be offering alkyds at $320 per drum as did the Japanese firm, Hashakawa, which recently entered the US market with the purchase of a small local company.
When I spoke to our second largest customer today, they are enthusiastic about the lower prices since they felt it would make them much more competitive at a time they were losing market share. And here in the trade magazine is the announcement that Vestey Chemicals is introducing a super grade product priced at $400 per drum.
The market has been static for the past couple of years and now, all of a sudden, we are seeing a flurry activity. All of which leaves me to the question of how to price our Grade A product for the coming year.
Question 1: how would you analyze this industry in term of Michael Porter’s Five Forces model?
Question 2: Why might (a) Pinkney-Ross have decided to reduce its selling price (given that it costs will also have increased0, (b) Pekken have decided to match Pinkney-Ross’ price, and (c) Hashakawa have adopted the lower price?
Question 3: what impact might Vestey Chemical’s introduction of a super grade product have on the market for Grade A alkyds?
|
Which phenomenon morbidity or mortality is better to study
: How would you use demographic data to characterize this disease? How would you incorporate further research to address this disease? How would you use morbidity and mortality in developing prevention strategies aimed at increasing attention to diseas..
|
|
Do mechanics or their customers do anything to limit
: 1.2) Mechanics usually have better information about how to fix automobiles than their customers. A.) What sorts of problems does this advantage create? B.) Do mechanics or their customers do anything to limit these problems?
|
|
Internal consistency at customer first
: "Internal Consistency at Customer First" Please respond to the following: Determine how job analysis and job evaluation could be used at Customers First to develop an internally consistent compensation system. Determine whether or not you agree with ..
|
|
The el dorado star is the only newspaper in el dorado
: The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such a..
|
|
Process of finalization her plans-marketing strategy
: Rachel Myers was in the process of finalization her plans for the upcoming year. As general manager of the Plasticizer Division, she needed to establish the marketing strategy for each of the four main product groups. what impact might Vestey Chemica..
|
|
Average of customers waiting in line
: 1. A research study performed at checkout lines at Publix Supermarket in South Florida revealed that between 4pm and 7pm on weekdays there is an average of 4 customers waiting in line. What is the probability that you visit a Publix today during t..
|
|
At the profit-maximizing output level
: At the profit-maximizing output level you reported in question 3, is the El Dorado Star making the greatest possible amount of TOTAL REVENUE? Is this what you expected? Explain BRIEFLY
|
|
Calculate the weighted average cost of capital
: Based on the information below, calculate the weighted average cost of capital.
|
|
Are these skills important when working in human resources
: Are these skills important when working in human resources? Why?
|