Business Case Studies
(Please try to be as descriptive as possible)
Q1. Wipro developed a light bulb that never burns out. It could burn for a thousand years. The director of marketing calls you into his office and asks you, "How do we price this product?" What do you tell him? What are the points you would like to discuss with him for arriving at a conclusion on price?
Please solve it.
From India, Aligarh
Acknowledge(0)
Amend(0)
1(Please try to be as descriptive as possible)
Q1. Wipro developed a light bulb that never burns out. It could burn for a thousand years. The director of marketing calls you into his office and asks you, "How do we price this product?" What do you tell him? What are the points you would like to discuss with him for arriving at a conclusion on price?
Please solve it.
From India, Aligarh
Acknowledge(0)Amend(0)
Pricing can be determined by considering the following factors:
Manufacturing Cost + Profit Margins as per Product Life Cycle (PLC)
Fixed Asset Recovery Margins
Comparative Pricing to Closest Substitute
Product Life Cycle (PLC): Introduction, Growth, Maturity, Decline
New Market Segments
Regarding the product's lifespan (1000 years), this feature or attribute can be utilized to enhance sales through extensive advertising.
From Kuwait, Salmiya
Acknowledge(0)Amend(0)
Manufacturing Cost + Profit Margins as per Product Life Cycle (PLC)
Fixed Asset Recovery Margins
Comparative Pricing to Closest Substitute
Product Life Cycle (PLC): Introduction, Growth, Maturity, Decline
New Market Segments
Regarding the product's lifespan (1000 years), this feature or attribute can be utilized to enhance sales through extensive advertising.
From Kuwait, Salmiya
Acknowledge(0)Amend(0)
In the absence of consumption and fitting, direct or replacement usability details: Who will benefit for 1000 years - Government, Industry, Corporates, MNCs, TNCs, so the focus should mainly be here. Even if a company closes, it can still recover at least from the bulb by reselling it.
You and I may die at least around 50 (+/- 50) years! So, how will it hold value if I 'Will' it to my heirs and what is the holder/bulb damage probability? Ordinary consumers will opt for lesser-priced ones that last long enough.
Therefore, prices should be set at 5-10 times higher based on frills and design compared to the costliest one of the same wattage to sustain the Product Life Cycle investment and factor in reaping before competition introduces something cheaper.
From India, Madras
Acknowledge(0)Amend(0)
You and I may die at least around 50 (+/- 50) years! So, how will it hold value if I 'Will' it to my heirs and what is the holder/bulb damage probability? Ordinary consumers will opt for lesser-priced ones that last long enough.
Therefore, prices should be set at 5-10 times higher based on frills and design compared to the costliest one of the same wattage to sustain the Product Life Cycle investment and factor in reaping before competition introduces something cheaper.
From India, Madras
Acknowledge(0)Amend(0)
Price can be fixed based on the points mentioned below:
1. Durability
2. Price comparison with competitors
3. Manufacturing cost
4. Promotion cost
Durability or reliability features can be used to attract consumers.
Regards,
Shahzor
From India, Hyderabad
Acknowledge(0)Amend(0)
1. Durability
2. Price comparison with competitors
3. Manufacturing cost
4. Promotion cost
Durability or reliability features can be used to attract consumers.
Regards,
Shahzor
From India, Hyderabad
Acknowledge(0)Amend(0)
Hi,
Pricing will be determined by considering the investment made to produce each bulb and sell it in the market. The company will only receive a one-time profit from sales. For example, if a truck of 20,000 bulbs is sold, the company will receive the net or gross amount only once, and there will be no additional payments.
The product can be priced moderately to increase sales. However, if it lasts long, the sales of bulbs may decrease, providing Wipro with a competitive advantage.
Regards,
Samarth
From India, Rajkot
Acknowledge(0)Amend(0)
Pricing will be determined by considering the investment made to produce each bulb and sell it in the market. The company will only receive a one-time profit from sales. For example, if a truck of 20,000 bulbs is sold, the company will receive the net or gross amount only once, and there will be no additional payments.
The product can be priced moderately to increase sales. However, if it lasts long, the sales of bulbs may decrease, providing Wipro with a competitive advantage.
Regards,
Samarth
From India, Rajkot
Acknowledge(0)Amend(0)
It would depend a lot on the risk of the product getting copied! Sometimes there can be a first-mover disadvantage as well! Besides the above factor, the cost of the bulb for a time period in a consumer's life has to be taken into account. There will be security issues that crop up, as bulbs are often stolen from public places! If the mass market is the target, it has to be priced economically, with patents and non-sale of similar products by the competitors in the market!
From India, Guwahati
Acknowledge(0)Amend(0)
From India, Guwahati
Acknowledge(0)Amend(0)
Hi,
Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will go for Wipro bulbs and think about those who are planning to start a business unit. I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, so there is no one to compete.
(Maybe my mistake with the decrease in sales; I meant other companies.)
Regards,
Samarth
From India, Rajkot
Acknowledge(0)Amend(0)
Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will go for Wipro bulbs and think about those who are planning to start a business unit. I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, so there is no one to compete.
(Maybe my mistake with the decrease in sales; I meant other companies.)
Regards,
Samarth
From India, Rajkot
Acknowledge(0)Amend(0)
Hi,
Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, with whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will opt for Wipro bulbs. When people are planning to start a business unit, I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, leaving no one to compete.
{Maybe my mistake with the decrease in sales meant of other companies}
Please do suggest if I am wrong anywhere. I appreciate your reply. Thanks.
Regards,
samarth
From India, Rajkot
Acknowledge(0)Amend(0)
Let us say that each bulb sold will last for and work at its optimum for 50 years.
Now, if Wipro, with whatever market share it has, sells these bulbs in the market lasting for 50 years, I don't think this type of news will stay down. People will opt for Wipro bulbs. When people are planning to start a business unit, I think they will purchase it in bulk, which will increase Wipro's sales and decrease other companies' sales, leaving no one to compete.
{Maybe my mistake with the decrease in sales meant of other companies}
Please do suggest if I am wrong anywhere. I appreciate your reply. Thanks.
Regards,
samarth
From India, Rajkot
Acknowledge(0)Amend(0)
While pricing one product, we need to consider some aspects like:
1. Cost of Manufacturing & Cost of Machinery for Data.
2. Location Charges.
3. Human resources.
4. This is like teamwork & an expensive endeavor.
If the bulb does not burn out, it means the sale will happen only the first time, and that first time is the last time for the sale of that product. After a decline in sales of a particular product, we need to consider all aspects and design based on market standards.
When pricing the product, we need to consider all aspects and price according to the standards to generate profits, which is the wealth of the organization.
From India, Bangalore
Acknowledge(0)Amend(0)
1. Cost of Manufacturing & Cost of Machinery for Data.
2. Location Charges.
3. Human resources.
4. This is like teamwork & an expensive endeavor.
If the bulb does not burn out, it means the sale will happen only the first time, and that first time is the last time for the sale of that product. After a decline in sales of a particular product, we need to consider all aspects and design based on market standards.
When pricing the product, we need to consider all aspects and price according to the standards to generate profits, which is the wealth of the organization.
From India, Bangalore
Acknowledge(0)Amend(0)
Marketers will never make such a product where they can not do repeat sales!! Practical! ;)
From India, Guwahati
Acknowledge(0)Amend(0)
From India, Guwahati
Acknowledge(0)Amend(0)
What is this case study for? If it is for study you are doing, why are you asking other people to do YOUR work for you?? To present other people’s work and ideas as your own is dishonest.
From Australia, Melbourne
Acknowledge(0)Amend(0)
From Australia, Melbourne
Acknowledge(0)Amend(0)
Dear sir,
I would set the price of the bulb at a normal rate and provide a warranty to the customer. By fixing the price at a normal rate, all bulbs produced will emit the same kind of light that people are accustomed to. Additionally, offering warranty extensions can increase sales of this particular bulb compared to any other.
Thanking you
From India, Madras
Acknowledge(0)Amend(0)
I would set the price of the bulb at a normal rate and provide a warranty to the customer. By fixing the price at a normal rate, all bulbs produced will emit the same kind of light that people are accustomed to. Additionally, offering warranty extensions can increase sales of this particular bulb compared to any other.
Thanking you
From India, Madras
Acknowledge(0)Amend(0)
This product does not fall on conventional marketing lines, so my conclusion is it cannot be successfully sold. The only possible way is to lease it out to its customers rather than selling it. That is the only way the market would accept such a product, and the company can maintain its control over it.
Just an out-of-line thought... thanks
From India, Delhi
Acknowledge(0)Amend(0)
Just an out-of-line thought... thanks
From India, Delhi
Acknowledge(0)Amend(0)
Dear Krishnan,
Various bloggers have given you responses that you can base your answer on. Aussiejohn has raised a valid question, to which I will add some of my own as is my wont.
Are you a student who has been assigned a task? If so, what course are you pursuing, and what is your background? It is preferable for students to express their thoughts on the answer and then seek feedback to refine it. If you intend to base your response on the comments provided here, it would be appropriate to include a link to this site and acknowledge that you have developed your answer based on people's comments. This approach would be the most ethical way to avoid plagiarism.
As someone has pointed out, the income from selling a light bulb is a one-time occurrence, unlike selling a car which generates income from services offered and the demand for spare parts, etc. Given that the cost will be relatively low compared to equipment costs, an extended lifespan only enhances competitiveness. When our lifespan is much shorter than that of the proposed item, do you think people would rush to buy it if it is more expensive than the alternatives available? Kindly put on your thinking cap and consider what you would do. Additionally, ask your friends and relatives a hypothetical question (that's what the posed question is).
Have a nice day.
Simhan
From United Kingdom
Acknowledge(0)Amend(0)
Various bloggers have given you responses that you can base your answer on. Aussiejohn has raised a valid question, to which I will add some of my own as is my wont.
Are you a student who has been assigned a task? If so, what course are you pursuing, and what is your background? It is preferable for students to express their thoughts on the answer and then seek feedback to refine it. If you intend to base your response on the comments provided here, it would be appropriate to include a link to this site and acknowledge that you have developed your answer based on people's comments. This approach would be the most ethical way to avoid plagiarism.
As someone has pointed out, the income from selling a light bulb is a one-time occurrence, unlike selling a car which generates income from services offered and the demand for spare parts, etc. Given that the cost will be relatively low compared to equipment costs, an extended lifespan only enhances competitiveness. When our lifespan is much shorter than that of the proposed item, do you think people would rush to buy it if it is more expensive than the alternatives available? Kindly put on your thinking cap and consider what you would do. Additionally, ask your friends and relatives a hypothetical question (that's what the posed question is).
Have a nice day.
Simhan
From United Kingdom
Acknowledge(0)Amend(0)
Realistic Scenario!!!
- Wipro shall patent the technology.
- Other companies get a hint of the possibility. There is then a huge conference with eminent members with Wipro heads.
- They realize the technology would choke their businesses as the cyclical consumption of a product is no more.
- They decide to pay an amount to Wipro and bury the technology until absolutely required.
From India, Bangalore
Acknowledge(0)Amend(0)
- Wipro shall patent the technology.
- Other companies get a hint of the possibility. There is then a huge conference with eminent members with Wipro heads.
- They realize the technology would choke their businesses as the cyclical consumption of a product is no more.
- They decide to pay an amount to Wipro and bury the technology until absolutely required.
From India, Bangalore
Acknowledge(0)Amend(0)
Hi,
Very well said, Twisha Jain. With due respect, I agree. I was presenting the point of view that if they make it for a one-time sale, making things for just a one-time sale in normal logic will obviously not make sense.
Regards,
Samarth
From India, Rajkot
Acknowledge(0)Amend(0)
Very well said, Twisha Jain. With due respect, I agree. I was presenting the point of view that if they make it for a one-time sale, making things for just a one-time sale in normal logic will obviously not make sense.
Regards,
Samarth
From India, Rajkot
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
HR as Product.doc
The Five Competitive Forces That Shape Strategy.zip