As for many organizations, the challenge of coming up with a new product lies with the product development department. In this case the name of the new product shall be Collabo. Collabo is a unique laptop with phone features that allow the user to make and receive calls, write short messages and besides, perform all other functions of a normal computer. In case of a phone call, the user receives it via its earphones.
The gadget has an alternative source of power so that even those from rural areas without electricity can be able to operate it easily. This implies that the Collabo product meets the United Nations conventions on environment in line with the making use of the natural sources of energy such as the sun that does not involve so much processing that emits gases that are harmful.
It is intended to cut the costs of buying two separate gadgets which might be too expensive for most of the consumers. This is made possible through a combination of both the phone and laptop features in one gadget and then priced as a unit.
As for this product, the market segmentation variable that will be used is the geographic variable. Geographic segmentation entails classifying the market based on age, occupation, income and religion (Burrell, 2004).
However, in this case, we shall classify the market while laying emphasis on age and income of the consumers. This method of segmentation is the best for Collabo because it involves a lot of technological applications that require young and ambitious people. In addition, any company that is searching for a large market, then the young population shall be the option to go for.
This is because in many countries, the population of the youths is more than that of the old people. Consequently, there are more youths in the labor market than their old counterparts. Besides, these young people have little disposable income and most of them hence cannot afford to buy a phone and a laptop separately and thus the need for this new product.
Specifically, the target market for Collabo shall be the young people of the age bracket 20 to 28 years old. Most of the people in this bracket are college and young employees who are aggressive and fast in embracing a new technology. In addition, they get a yearly income of $ 10,000 to $ 40,000 on average depending on whether they are students or newly employed.
This means they can only buy a product that does not stretch their disposable income to a larger extent. With the emergency of the current trends in business where people make transaction over the web, it is prudent for people to make use of efficient gadgets that facilitate business activities.
It is worth noting that the youths are so much into social networks such as Facebook and Twitter than any other sites. According to psychologists, people in this age bracket are into intimacy versus isolation and consequently, most of their social needs are met through chatting and befriending people on these sites.
They spend most of the time on the internet because it quickly avails their wants by just a click on the mouse. It is with this concern on the behavior of customers that the Collabo product shall be invented so that it suits the needs of its target group.
Moreover, the product (Collabo) shall be of benefit to the market because of its relatively low price, thus saving the real income of the consumers (Kotler, 2001). Besides, it saves energy as it is only one gadget’s battery that is in use compared to the case of two separate gadgets with different batteries.
In addition, most of the assignments are sent by the lecturers over the internet to the students. This implies that those who have regular access to the internet get the assignments in time than those who do not have. Furthermore, the students are required to type and submit typed work for marking and also to create references for their work. All these requirements are time consuming and tedious to conduct. Hence, when all the above needs are put into consideration, the Collabo becomes the best product for them (students).
Looking at the market prices, a standard laptop goes for $ 500 but Collabo with its inbuilt laptop and phone features, shall be introduced at a price of $ 425 because we want to establish a presence in the market while keeping check on the quality of our product.
When a company introduces a new product in the market, it ventures into advertisements, giving free samples and also not forgetting to offer the products at a relatively lower price in order to attract a large customer base. It is worth noting that in as much as the new product, Collabo enters the market, there are other relatively similar products in the industry. So, the mangers have to select the price of this product diligently to keep up with the base of the market.
The pricing strategy that shall be employed is the cost-based pricing with emphasis on the product features. This is meant to cover the cost of the features and the profit margins so that the firm can be efficient in its operations. The other things considered in this pricing strategy is the technology employed in producing the product and the labor.
If the technology is imported, then the prices of the products go high. However, as for Collabo, the technology that shall be used is going to be sourced locally while also making use of local labor. This translates to low prices for Collabo.
The objectives that shall be met include satisfying the consumers’ needs and remaining competitive in the market. Collabo satisfies the consumers’ needs through convenience in providing all services of a phone and laptop in one gadget.
On the other hand, the patent rights that shall be acquired will enable the firm to continue enjoying its innovation over a long time and this facilitates a competitive edge in the market.
It goes without saying that the product is worth this price because it is an initial price that is meant to attract more and make the product relatively affordable. Besides, it covers the cost of producing it.
Following the product life cycle (PLC), at the introductory stage, the product will be charged for $ 425 as we endeavor to gain access into the market. The lower price shall serve both as a pricing strategy and a package of attraction. At the growth stage, we shall increase the price to $ 450 to cover the costs of advertising and sales.
This is a stage when the firm has gained some market presence and hence has some royal customer. However, at maturity stage, we will charge $ 500 to keep up with the market prices and at this point many customers would have embraced our products. Finally, at the decline stage, we shall lower the price to $ 450 if we find there is need for us to divest the product from the market. This will depend on the customer demand for the Collabo.
Reference List
Burrell, T. (2004). Marketing strategies. New York, NY: Russell Sage Foundation.
Kotler, P. (2001). Principles of marketing. New York, NY: Pearson.