Marketing, Communication and Pricing

Strategy

V s
Production Cost By Caterpillar = $30,000
Customer Perceived Value = $100,000

Points to remember:
•Gap of 70,000 $ i.e. between Cost Price and Perceived
Price is to be shared between Company and Customer.
•Price has to be <$30,000 -$100,000 >

Factors affecting Price :

1. Profit expectation of Company
2. Profit expectation of Buyer
3. Competitive Response – at what cost competitor can
copy the product and in how much time?
The Two Scenarios:
1.Little innovation in Bulldozer so Komatsu can
make an equivalent (Equal CDV= all
components of TCC & TCB are same) within
one week at the cost of $20,000 in the
market.

2.The innovation is high and patentable so

Komatsu will tale minimum three years after
the launch and the will copy the product at a
cost of $20,000 in market.
Strategy 1 (Product copied in 1 Week)

Reduce Manpower Cost

Manage Waste Reduction
Bind By the Delivery Time
Negotiate With the Suppliers On a large Scale
Strategy 2 (Product Copied in 3 years)
Skimming Strategy
•Price of Bulldozer $75,000

Marketing Strategy
•Direct Selling
•Personal Selling
•Advertisement in Business Magazine
•Catalogues
•Promotion Through Trade Fair
Than
k
You !!