Please answer the given questions writing between 250 to 350 words to each questions.
Problem 1. Of the four "P's" we have studied so far, which do you think might be the most important? Why? Use a personal experience to help illustrate your opinion?
Problem 2. Read Case Study MultiMedia Corral, (see below). Evaluate what MultiMedia is doing and what happened with the special promotion. What should Josh do to increase sales and profits?
Problem 3. Think about the phrase ..., "what the market will bear" in terms of Price. When is this appropriate, or is it? Is this a "valid" pricing mechanism, or not? Explain.
Case Scenario: Multimedia Corral
Josh Sullivan, manager of Multimedia Corral, is looking for ways to increase profits. But he’s turning cautious after the poor results of his last effort, during the previous Christmas season. Multimedia Corral (MC), is located along a busy crosstown street about two miles from the downtown of a metropolitan area of 1 million and near a large university. It sells a wide variety of products used for its different types of multimedia presentations. Its lines include high-quality video and digital cameras, color scanners for use with computers, teleprompters and projection equipment, including videobeam overhead projectors and electronic projectors that produce large-screen versions of computer output. Most of the sales of this specialized equipment are made to area school boards for classroom use, to industry for use in research and sales, and to the university for use in research and instruction.
Multimedia Corral also offers a good selection of production quality video media (including hard-to-get multilayer recordable DVDs), specialized supplies (such as the large-format acetates used with backlit signs), video and audio editing equipment, and a specialized video editing service. Instead of just duplicating videos on a mass production basis, Multimedia Corral gives each video editing job individual attention—to add an audio track or incorporate computer graphics as requested by a customer. This service is really appreciated by local firms that need help producing high-quality DVDs—for example, for training or sales applications.
To encourage the school and industrial trade, Multimedia Corral offers a graphics consultation service. If a customer wants to create a video or computerized presentation, professional advice is readily available. In support of this free service, Multimedia Corral carries a full line of computer software for multimedia presentations and graphics work.
Multimedia Corral has four full-time store clerks and two outside sales reps. The sales reps call on business firms, attend trade shows, make presentations for schools, and help both present and potential customers in their use and choice of multimedia materials. Most purchases are delivered by the sales reps or the store’s delivery truck. Many repeat orders come in by phone or mail, but e-mail and electronic file exchange has become common.
The people who make most of the over-the-counter purchases are (1) serious amateurs and (2) some professionals who prepare videos or computerized presentation materials on a fee basis. Multimedia Corral gives price discounts of up to 25 percent of the suggested retail price to customers who buy more than $2,000 worth of goods per year. Most regular customers qualify for the discount.
In recent years, many amateur photo buffs have purchased digital cameras to capture family pictures. Frequently, the buyer is a computer user who wants to use the computer as adi git al darkroom—and the cameras now available make this easy. Multimedia Corral has not previously offered the lower priced and lower-quality digital models such buyers commonlywant. But Josh Sullivan knew that lots of such digital cameras were bought and felt that there ought to be a good opportunity to expand sales during the Christmas gift-giving season.
Therefore, he planned a special pre-Christmas sale of two of the most popular brands of digital cameras and discounted the prices to competitive discount store levels—about $169 for one and $229 for the other. To promote the sale, he posted large signs in the store windows and ran ads in a Christmas gift-suggestion edition of the local newspaper. This edition appeared each Wednesday during the four weeks before Christmas. At these prices and with this promotion, Josh hoped to sell at least 100 cameras. However, when the Christmas returns were in, total sales were five cameras. Josh was extremely disappointed with these results—especially because trade experts suggested that sales of digital cameras in these price and quality ranges were up 200 percent over last year—during the Christmas selling season.