Curled Metal Inc
Sales Management and Personal Selling
Curled Metal Inc (CMI)
Dear Sanwal,
To address your immediate need from Kendrick Foundation Company (‘KFC’) for a price quote on Curl Metal Cushion Pads (Cushion pads or ‘CMCP’), it would be beneficial to establish a proper pricing strategy. It may also be beneficial to not only consider the short term, but also the potential long term pricing strategy for future consumers as well. To estimate the value price or price premium, it is advisable to keep in mind perceived value added propositions for your consumer. Also, as with most products, it is meaningful to perform a margin analysis based on potential pricing to customers to determine profitability of the overall product venture. Last but not least, external competition should also be considered as a factor on your product price.
First, based on the information given, relative pricing analysis can be performed utilizing information from consumer purchases of conventional pads. Based on the price paid for the conventional pads for each project, it can be assumed the customer is willing and able to pay comparable pricing for CMCP (assuming the same benefits are created for users). A higher value price can be created by emphasizing the additional features or benefits of utilizing CMCP versus the conventional pads. The main additional features include more efficient pile driving time and less required time for change (overall less labor utilized), this value proposition can be estimated based on labor cost savings. In addition, CMCP are generally safer than the conventional pad, while the measurement of this value/benefit may be harder to measure, it is yet another selling point that could increase the price premium the customer is willing to pay for CMCP. For purposes of having a measurable pricing strategy, the focus of this analysis is on labor time savings. Assuming the average cost per Real Hour is $63/Hour for labor (HBS – Curled Metal Inc – Table A), and
Curled Metal Inc (CMI)
Dear Sanwal,
To address your immediate need from Kendrick Foundation Company (‘KFC’) for a price quote on Curl Metal Cushion Pads (Cushion pads or ‘CMCP’), it would be beneficial to establish a proper pricing strategy. It may also be beneficial to not only consider the short term, but also the potential long term pricing strategy for future consumers as well. To estimate the value price or price premium, it is advisable to keep in mind perceived value added propositions for your consumer. Also, as with most products, it is meaningful to perform a margin analysis based on potential pricing to customers to determine profitability of the overall product venture. Last but not least, external competition should also be considered as a factor on your product price.
First, based on the information given, relative pricing analysis can be performed utilizing information from consumer purchases of conventional pads. Based on the price paid for the conventional pads for each project, it can be assumed the customer is willing and able to pay comparable pricing for CMCP (assuming the same benefits are created for users). A higher value price can be created by emphasizing the additional features or benefits of utilizing CMCP versus the conventional pads. The main additional features include more efficient pile driving time and less required time for change (overall less labor utilized), this value proposition can be estimated based on labor cost savings. In addition, CMCP are generally safer than the conventional pad, while the measurement of this value/benefit may be harder to measure, it is yet another selling point that could increase the price premium the customer is willing to pay for CMCP. For purposes of having a measurable pricing strategy, the focus of this analysis is on labor time savings. Assuming the average cost per Real Hour is $63/Hour for labor (HBS – Curled Metal Inc – Table A), and