Problem:
Your company markets a 15-inch Multimedia LCD TV system that allows the computer user to enjoy high-resolution video entertainment. The product was introduced five years ago. After several years of growth, sales have slowed and it was recently necessary to mark down the retail price to under $500 in order to remain competitive. Profits are approaching the breakeven point. On the other hand, sales of the 17-inch Multimedia LCD TV system, which was introduced at the same time and retails for $725, continue to grow, in part because it recently received an excellent rating from Consumer Reports magazine for monitors in its price range. In addition, recent in-store surveys indicate 70% of potential customers prefer the larger screen.
You and the other managers realize that several options are available. They include:
1. Combine the monitor with a low cost CPU and market them as a student workstation suitable for a dormitory room or computer lab.
2. Modify the product's features, styling or performance.
3. Cut the price to attract new buyers and competitor's customers.
4. Continue marketing the product at the same price in the hope that competitors will drop out of the market, allowing you to raise the price again.
5. Launch more aggressive advertising campaigns and sales promotions.
6. Discontinue the 15-inch model and focus company resources on promoting the 17-inch model.
Contribute to the manager's meeting.
Which of these options would you recommend and why?