IGA SALMA R.

GIOVANNO T.
CASE STUDY : MacElroy & Lavidge

1. What factors should McElroy take into account when considering whether
to drop the SonPan line of transistors?
 Competition
There is a new competitor that entered the market and SonPan cannot
compete with the new company so they have to give 18% discount to their
customers in order to sell their products.
 Lack of innovations
SonPan cannot compete with the new company because SonPan didn’t
have any innovations in producing their product so their buyers prefer to
buy products from SonPan’s competitor.

2. What stage of the PLC is the Kinetec line? What can McElroy do to speed
acceptance of the product without discounting the price? What will signal
to McElroy sufficient acceptance that discounting is no longer needed to
get the sale?
 Introduction state. Because Kinetec Line just introduced only three months
ago, they still give discount to their customers so people can try their new
product.
 McElroy can put more effort on the advertisement and marketing activity
for their new Kenetic Line of electronic switches so their product
awareness will increase.
 When the sales had reached a certain amount. If the sales of the product
have a high amount, there is a high chance that people will buy their
product even though there is no discount.

3. McElroy&Lavidge is a distributor. What does this mean in terms of new

product development? What role should they play in identifying and
building relationships with lead users?

A distributor is an entity that buys noncompeting products or product lines

and sells them direct to end users or customers. Most distributors also
provide a range of services such as technical support, warranty or service.
Distributors are essential in helping reach markets manufacturers could not
otherwise target.

It is easy for the company to identify lead users because lead users are people
who deal intensively with a problem in an application area for which there is no
suitable solution on the market. These users feel a need much earlier than the
masses or the average customers. The company can build a relationship with
them by trusting them and try to include them in the process of developing a new
product.