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Walker Ltd is a New Zealand manufacturer of sports shoes for men and women. It has sustained strong growth in the New Zealand market in recent years due to comfortability and quality of its shoes. Walker Ltd. Is considering extending its business in the Australian market, where identical shoes sell for an average of $85 wholesale price. Management has appointed a marketing consultant to obtain information about what features Australian consumers seek most in shoes. The marketing consultant conducted a market- research and provided Walker Ltd following information on the features and approximate cost of adding these features for Australian market:
Features Desired in Cost to add ( in customer choice Rating
Australian market (5 is most important ) Colour fast material $14.5 1 Lighter weight 16.75 3 Extra-soft inside 13.00 2 Longer-wearing sole 15.5 4
Problem 1: Should there be any cost reduction target if Walker Ltd. is not considering any new feature for entering the Australian market? Justify your answer.
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