Computron Inc.
1. What are the consideration affecting the price strategy of Computron? What is the relative of these considerations? What are the international marketing implications?
Some key factors which Computron has to take into consideration in determining the pricing strategy of 1000X digital computers in order to propose bidding for Konig are listed below:
1. The price which competitors are most likely to charge.
2. The future prospect of pricing in the long run such as future pricing of the digital computer to sale to Konig, future pricing for the other customers in the European market. In addition, Konig might negotiate to lower the price of the other product purchased from Computron or previously purchased from Computron as well. If the price was set too low, it will determine the price of Computron in the European market in the future, the company may not be able to increase the price back.
3. Positioning of the product since Computron currently set the position of their digital computer with high quality, reliable with premium price. If Computron lowers the price too much, it might affect their brand positioning.
4. The profit requirement of the company i.e. the 33.3% mark up? Can it be lowered? What's the acceptable level?
5. The capacity of the new plant in Germany. What's the capacity? Would it be possible to generate the high volume product and sale with economies of scale instead by taking advantage of the tax exemption?
The pricing strategy will affect Computron future business (profit and market share) in Germany, including the other customers around Europe. Future price and profitability of Computron in Germany and in Europe is the relative consideration.
2. How is the purchasing vice president of Konig ...