Terra Cog Case

1272 Words Aug 17th, 2008 6 Pages
Executive summary:

An impasse has occurred in the pricing decision of Aerial, TerraCog’s satellite imagery enabled GPS, due to a distinct mismatch in the price estimated by the production department and the desired price, set by the sales department. TerraCog, being already behind its competitor “BirdsI” by about two years, needs competitive pricing and superior quality to regain its market share.
Exploration of different available options by cooperation of the concerned departments can result in recapturing of the lost market share, profitability and realization of long-term benefits. A multipronged approach of aggressive marketing and efficient distribution can equip the higher priced Aerial to compete with “BirdsI”.

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• Recapturing lost market share
The higher pricing of Aerial by about $75 can act as a deterrent in regaining its lost market share to Posthaste’s “BirdsI”. It will also pose difficulty in obtaining retail shelf space.
An effective and aggressive marketing strategy along with efficient distribution network can help TerraCog regain its lost market share.
• Profitability
A reasonably good margin has been maintained in the $475 pricing of Aerial, so the venture might be profitable if the volume of sales go up.

• Long term benefits
TerraCog can have a complete grasp of the GPS (satellite imagery) market, if Aerial ousts “BirdsI” in the longer run. It can also set the base for future exploration in different segments. Customer faith and loyalty might be firmly re-instated.
There can be a loss of image if Aerial does not do well and can affect its existing customer base.

 Give 6 months time to the product development team for design improvements and cost reduction.
• Recapturing lost market share
Given the required time, the product development team is optimistic about coming up with superior product with probable cost reduction to take on “BirdsI”. Both these would place Aerial in a more competitive position with respect to its competitor.
TerraCog is already late in launching Aerial in the market by two years. Another six

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