The price analysis has been done on polystyrene foamed board, a product used for making dome-shaped roofs and other structures. The product has several advantages compared to the others in the market. The foam boards are stiff but can also be bonded by heat alone, they are light in weight, have a good structural rigidity, can be used for insulation, and many surface finishes can be applied on the foam boards, e.g., the concrete-based stucco which is cheap.
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The marketing survey on uses of existing dome structures revealed that they are made of cement-based materials. These materials take a long time in construction compared to the polystyrene foamed products.
The study showed that large savings would result from using foam boards they reduce the construction time. Bulk storage, cold storage, educational construction, covers for industrial tanks, light commercial constructions, planetariums and recreational construction (such as a golf-course starter house) are some of the areas that could be served by the domes.
The purpose of this exercise is to conduct an accurate price analysis on the foam boards to convince the managers of ApplPoly Products Company that they should invest in the new project proposed by Abby Preston. The marketing department should support her in researching by allowing her to demonstrate the use of the products and the therefore go-ahead to build more demonstration projects in the US, Europe and Japan which may welcome her idea.
The US is not the only market for the products. If it is difficult to launch a new product in the US, then it is prudent to enter the global market (Nagle, 2001). It is true that people may take some time to accept the new idea, so she may try to make more demonstration projects to be able to convince the users of the product to welcome her idea. The management should help her report the products in the trade papers and magazines to reach a large number of users.
Some of the factors to be considered while trying to market the product abroad include consideration of trade restrictions that may exist, environmental effects on the manufacturing of the products, the availability of users in the market, the current price of other related products in the market, the costs of making and promoting the product into new markets. The product should be lowly priced at the initial stages to acquire a larger share in the market (Hutt & Speh, 2002).
This is the appropriate strategy that shall ensure that the users are attracted to buy the product. The price can then be increased as the demand also increases in the market. This should be done gradually to avoid losing the users to the competitors.
However, the costs of producing the product may be high due to the materials used. Before deciding on the prices that will be charged on the products, consider the costs of production so that the product can be evaluated in terms of its profitability. The profit required by the management can then determine the final price to be charged to the users.
In conclusion, the management is advised to allow the demonstrations to be made across all regions where there are potential users to convince them that the product is satisfactory. Once it is accepted, the price to be set should consider all the factors that have already been discussed.
Hutt, M., & Speh, T. (2002). Business marketing management: B2B, South-Western, SW: Thomson Learning.
Nagle, T. (2001). The strategy and tactics of pricing: A guide to profitable decision making. New York, NY: Prentice Hall.