Dear members,
I have developed a case study on Strategies to Sell a Product at Premium Pricing. Though this is an HR forum and the case study is in the field of marketing, I am posting it because it is useful to the HR professionals as well. Please note that this is an original piece of work and not downloaded from some website. Neither it is copied from some book.
Thanks,
Dinesh Divekar
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Case Study on "Sell of a Product at Premium Pricing"
Amit Grewal is a business owner from Delhi who manufactures tissue papers. Amit Grewal hails from the family of the businesspersons. His father ran a business of the sale of the wheat flour. Amit wanted to do something different. In the mid-90s usage of the tissue-papers acquired a wider acceptance. Taking benefit of the new social trend, Amit started this new business. A couple of years later, he got married to Meenal and she also started assisting in his business.
Amit had first-mover advantage. Initial sales were high because there were few players in the market. Over a period of time the market in Delhi grew, so were his competitors. But then competition took toll of the profit margin. For many years, Amit observed that though the sales were increased, to sustain the competition, the profit had to be reduced.
Fed up with the low margin, he thought to serve the upmarket. Amit thought of introducing high-quality and design tissue-papers. He thought that his product-line did not have any high-end product and the introduction of this product in the premium category could give him better margins. He discontinued the production of regular tissue papers and started production of the premium product. But his dream was short-lived. He found that the market did not have the wider acceptance of the new product and moreover profit margins remained thin. He was surprised to find that howsoever product had a high-quality, it did not translate into the higher profit margin.
His business had one more inherent challenge in the form of attrition of the salespersons. As they were unable to break the ground, either they quit Amit’s company on their own or they were removed.
He tried various tricks to improve the sale of the premium product. But then promoting a product like tissue papers was difficult. Advertisements in the newspaper or FM Radio channels were costly. He even tried that also but there was no significant increase in the sale.
For every product, there is a customer but identifying those “right” customers, who pay a “right” price remained a conundrum for Grewal couple.
Recently, you met Meenal Grewal in a social function. She opened her mind and told that her husband has been facing the challenge of increasing the sale of the high-end product since her marriage. Though twenty years passed, they could not get the right pricing for their premium product. Occasionally they attended training programmes on the leadership. But it did not help either.
* * *
Disclaimer: - This case study is a work of fiction. Amit Grewal and Meenal Grewal are also fictitious names. Any resemblance of their names to the manufacturer’s tissue-papers is a matter of coincidence.
Task: - You are a marketing consultant. What advice would you like to offer so that Amit and Meenal can sell the tissue papers at a premium price?
Solution: - I conduct the training programme titled "Strategies for the Product Pricing". The solution is discussed during the training programme.
From India, Bangalore
7879I have developed a case study on Strategies to Sell a Product at Premium Pricing. Though this is an HR forum and the case study is in the field of marketing, I am posting it because it is useful to the HR professionals as well. Please note that this is an original piece of work and not downloaded from some website. Neither it is copied from some book.
Thanks,
Dinesh Divekar
+++++
Case Study on "Sell of a Product at Premium Pricing"
Amit Grewal is a business owner from Delhi who manufactures tissue papers. Amit Grewal hails from the family of the businesspersons. His father ran a business of the sale of the wheat flour. Amit wanted to do something different. In the mid-90s usage of the tissue-papers acquired a wider acceptance. Taking benefit of the new social trend, Amit started this new business. A couple of years later, he got married to Meenal and she also started assisting in his business.
Amit had first-mover advantage. Initial sales were high because there were few players in the market. Over a period of time the market in Delhi grew, so were his competitors. But then competition took toll of the profit margin. For many years, Amit observed that though the sales were increased, to sustain the competition, the profit had to be reduced.
Fed up with the low margin, he thought to serve the upmarket. Amit thought of introducing high-quality and design tissue-papers. He thought that his product-line did not have any high-end product and the introduction of this product in the premium category could give him better margins. He discontinued the production of regular tissue papers and started production of the premium product. But his dream was short-lived. He found that the market did not have the wider acceptance of the new product and moreover profit margins remained thin. He was surprised to find that howsoever product had a high-quality, it did not translate into the higher profit margin.
His business had one more inherent challenge in the form of attrition of the salespersons. As they were unable to break the ground, either they quit Amit’s company on their own or they were removed.
He tried various tricks to improve the sale of the premium product. But then promoting a product like tissue papers was difficult. Advertisements in the newspaper or FM Radio channels were costly. He even tried that also but there was no significant increase in the sale.
For every product, there is a customer but identifying those “right” customers, who pay a “right” price remained a conundrum for Grewal couple.
Recently, you met Meenal Grewal in a social function. She opened her mind and told that her husband has been facing the challenge of increasing the sale of the high-end product since her marriage. Though twenty years passed, they could not get the right pricing for their premium product. Occasionally they attended training programmes on the leadership. But it did not help either.
* * *
Disclaimer: - This case study is a work of fiction. Amit Grewal and Meenal Grewal are also fictitious names. Any resemblance of their names to the manufacturer’s tissue-papers is a matter of coincidence.
Task: - You are a marketing consultant. What advice would you like to offer so that Amit and Meenal can sell the tissue papers at a premium price?
Solution: - I conduct the training programme titled "Strategies for the Product Pricing". The solution is discussed during the training programme.
From India, Bangalore
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