1. As it can be monitored that the target market of this high-tech en will be the consumers belonging to the age group of 16 to 45, it can be easily understood that the consumers will vary from students to professionals. It can also be monitored that the high-tech can be used by the consumers for multiple activities such as writing as well as drawing designs on any medium (Solomon et al). In addition to this, the pen can also be used as a stylus to the mobile phones and as remote controls as well as speakers while giving presentations. Hence, in order to create an effective marketing strategy, creating a day in life of the target customers will be highly effective (Hinterhuber and Stephan). In order to create a “day in thee life” strategy, the target market is to be divided according to their age and profession. In addition to this, from the analysis of the targeted customers of the product it can be understood that the targeted consumers are demographically diverse as well. The brand aims at capturing the consumer base who are willing to update themselves along with the continuous technological advancements.
For the customers belonging to the age group of 16 to 19, it can be understood that the customers will mostly be students. In this regard, it can be said that the high-tech pen can be used while preparing their educational assignments and projects (Ottman). Moreover, it can be said that the pen can easily be used as GPS device while commuting from one place to another. It can be said that the inbuilt GPS system will be significantly helpful for the young students and most importantly to the foreign students. In addition to this, the device can be used as stylus to the mobile phones (Hinterhuber and Stephan). It can be easily understood that this feature will be highly sought after by the young people who are interested in recreation and self-expression. Moreover, it is to be said that cost effectiveness of the device is important for the young students. In this regard, it can also be understood that the usage of the pen as stylus will definitely allure the target audience to a great extent (Kim and Renée). Moreover, from the features of the high-tech pen it can be monitored that the pen can be used as speaker as well as remote. Hence, it can be sad that the students will be able to use the high-tech pen can be used by the customers belonging to the age group of 15 to 19 as a mode of entertainment as well. In addition to this, the high-tech pen will be significantly helpful in their studies as well.
In order to discuss the effectiveness of thee high-tech pen amongst the customers belonging to the age group of 20 to 45, it can be said that the majority of the target group will be working professionals (Lantos). In this regard, it can also be understood that the customers belonging to this group will have medium to high buying capabilities. In addition to this, it can also be understood that the demands and usage of latest and upgraded technology is comparatively higher amongst this consumer group (Solomon et al). Hence, in order to decide effective marketing and advertising strategy for the group a “day in life” analysis will be effective.
It can be monitored that in most of the scenarios, the working professionals are required to take help of advanced technologies for the purpose of drawing and designing. In this regard, it can be said that the technologically advanced pen can be used for this purpose (Kumar et al). In addition to this, it can also be said that the pen can be used effectively while performing a presentation (Hinterhuber and Stephan). As it can be used as both speaker and remote, it will be easy to use and handle in office. Moreover, the inbuilt GPS feature ill also be highly effective for the working professionals in order to commute to various places. In addition to this, the usage of the high-tech pen as stylus and that too with a cost effective manner will grab the attention of the customers to a great extent (Nagle, Thomas and Georg Müller). Moreover, it can easily be understood that the pen can be used as a mode of entertainment and recreation. Customers belonging to all age groups hence will be attracted to use this high-tech pen.
1. After analyzing the goal and strategies that are too be effectively followed in order to capture the targeted market, it can be said that the pricing strategy of the high-tech pen needs to be highly effective. It has been monitored that in the present context the biggest competitor of the high-tech pencil is the Apple pencil (Wensley). Hence, it can easily be understood that the pricing strategy of this product needs to address the cost effectiveness of the pencil. In this regard, it can be said that the Cost-plus pricing and Penetration pricing will be most effective in this regard. It can be understood that the Apple pencil enjoys a significant market presence due to its association with the brand name (Li, Lei and Dahui). However, the major shortcoming of the Apple pencil is the high cost of the product and its inability to be used on any other medium except from Apple note book. Hence, it can be easily understood that the primary pricing strategy of the high-tech pen will be cost effectiveness.
By employing the marketing strategy, the brand will be able to enter into the targeted market. It can be monitored that by employing penetration marketing strategy the brand will be able to introduce their product and that too in a cost effective manner (Gilmore et al). It can be understood that in order to compete with the Apple product, the pricing strategy that has to be used by the brad is introducing their product setting a low price.
Cost-plus pricing is one of the simplest methods of deciding marketing strategies. The marketing strategy incorporates calculating the cost of manufacturing of the product and eventually adding mark up (Guo et al). In order to capture the targeted market, it can be said that the high-tech pen can adopt the cost-plus pricing strategy effectively.
Another important as well as effective pricing strategy that can be adopted by the high-tech pen brand is the strategy of price bundling. It can be understood that the technologically advanced pen comes up with multiple features and services. In this regard, it can easily be said that the pen has combined multiple services (Hinterhuber and Stephan). Hence, the pricing strategy should be more focused on the multiple services that the pen is providing, rather than focusing on reducing the cost of the product.
By analyzing the possible strategies that can be implemented in the process of deciding the effective pricing strategy for the high-tech pencil, it can be said that combining both penetration pricing strategy along with the price bundling strategy will be most efficient (Guo et al). To elaborate it furthermore it can be said that the product comes up with multiple features that are highly useful for people belonging to different age groups and demographics. Hence, it can be understood that the product can be used as a device that has multiple usage (Solomon et al). Hence, price bundling will be highly effective. However, it can be easily understood that in order to capture a new market the brand needs to set product pricing in a cost effective manner.
2. In order to determine the monthly as well as annual sales of thee brand, performing a break-even analysis is highly important (Hinterhuber and Stephan). In this regard it can be said that by performing the break even analysis of the brand, the company will be able to understand the effective strategies that are to be taken up in order to achieve and maintain profit in the business. In this regard, a detailed analysis of the break even point is also to be done.
|
Break Even analysis |
|
|
Monthly Units Break-even |
1,4000 |
|
Monthly Sales Break-even |
$ 410,500 |
|
Assumptions |
|
|
Average per-unit revenue |
$ 300.00 |
|
Average per-unit variable cost |
$ 234.50 |
|
Estimated monthly fixed cost |
$ 84,134 |
By performing the break even analysis of the brand it can be said that the company aims at selling around 1,400 units of the high-tech pencil so that it is able to cross the aimed break even line. Moreover, it can be said that the business strategy of the brand will be highly dependent on the assumptions that have been made in order to decide the revenue generated on per unit (Solomon et al). The average selling price per unit signifies the average selling price of the product along with the maintaining effective profitability of the brand (Hinterhuber and Stephan). However, it is to be noticed that the average per unit cost includes thee variable as well as incremental cost that is to be added up with the manufacturing and advertising costs (Hinterhuber and Stephan). In addition to this, it can be monitored that the assumed cost of per unit and the fixed costs will create impacts on deciding and forecasting the possible costs of production along with deciding the profits that the organization can be achieved (Ottman). In addition to this, it can be said that the organization can take up necessary steps and strategies in order to reduce the risks of acquiring loss along with maintaining the profitability of the brand.
Reference
Gilmore, Anna B., et al. “Understanding tobacco industry pricing strategy and whether it undermines tobacco tax policy: the example of the UK cigarette market.” Addiction 108.7 (2013): 1317-1326.
Guo, Xiaolong, et al. “Cooperation contract in tourism supply chains: The optimal pricing strategy of hotels for cooperative third party strategic websites.” Annals of Tourism Research 41 (2013): 20-41.
Guo, Xiaolong, et al. “Optimal pricing strategy based on market segmentation for service products using online reservation systems: An application to hotel rooms.” International Journal of Hospitality Management 35 (2013): 274-281.
Hinterhuber, Andreas, and Stephan M. Liozu. “Is innovation in pricing your next source of competitive advantage? 1.” Innovation in Pricing. Routledge, 2017. 11-27.
Kim, W. Chan, and Renée A. Mauborgne. Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press, 2014.
Kumar, V., et al. “Practice prize winner—creating a measurable social media marketing strategy: increasing the value and ROI of intangibles and tangibles for hokey pokey.” Marketing Science 32.2 (2013): 194-212.
Lantos, Geoffrey Paul. Consumer behavior in action: Real-life applications for marketing managers. Routledge, 2015.
Li, Yongjian, Lei Xu, and Dahui Li. “Examining relationships between the return policy, product quality, and pricing strategy in online direct selling.” International Journal of Production Economics 144.2 (2013): 451-460.
Nagle, Thomas T., and Georg Müller. The strategy and tactics of pricing: A guide to growing more profitably. Routledge, 2017.
Ottman, Jacquelyn. The new rules of green marketing: Strategies, tools, and inspiration for sustainable branding. Routledge, 2017.
Solomon, Michael R., et al. Consumer behavior: Buying, having, and being. Vol. 10. London: Pearson, 2014.
Wensley, Robin. “The basics of marketing strategy.” The marketing book. Routledge, 2016. 75-107.
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