You have just taken over the job of senior product manager for a line of Consume

Question

You have just taken over the job of senior product manager for a line of Consumer Home Routers at Cisco. On your first day at work (March 15…the Ides of March) your new boss walks into your office and informs you that your product line will be discontinued and replaced by a (revolutionary) new product line on October 1 of the same year. She also tells you that she wants you to raise prices on your existing product line by 20% in order to protect profitability during the transition. After a moment of (stunned) reflection, you tell her that you need 24-hours to gather some information and will respond to her at that time. You go to a number of sources including field sales VPs, market research, other product managers, and an external consulting firm (McKinsey & Co.) and ask them how responsive customers have been to changes in prices in the past. They tell you that a 10% change in price always leads to a 20% change in sales volume. The next day you walk into your boss’s office. What is your recommendation and what is your reasoning? Using marketing’s 4P’s how do you tell her that you would implement your decision?

Explanation / Answer

Solution.

The recommendation is to increase the sales as the change in price by 10% the sales would change by 20%. Hence if the price is decreased by 10% then the sales would increase by 20%.

Using marketing’s 4P’s the decision would be implemented by Pricing strategy. When the price of the product would decrease then the sales would definitely increase as the survey also shows it. Hence if the list price decreases by discount allowances, payment period increases and credit terms are used not rigid but flexible then the sales would improve.

On the other hand after Pricing the Product also plays a vital role to increase the sales as provide the product to customer of different quality design and with different features with good packaging services.

Place is also very important factor to increase the sales as it covers the location of inventory and transportation logistics and Assortments. Which provide a better network for transferring the goods from one place to another without wastage of time and consumer will get happy to buy the product at minimum time of period at home. It would also improve sales.

Promotion helps a lot for selling the product now a day it is key to a product for selling. It includes advertisement personal selling, sales promotion, public relation and direct marketing.

All the above effort would increase the sale of the Cisco.

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