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Terra Cog Case Study Essay

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Executive Summary
TerraCog, which has been facing a drop in sales of its GPS products, had decided to meet consumer demands of a product with satellite imagery display by launching Aerial. However, the decision to launch Aerial has met with a roadblock on price. On one hand, the Production and Design & Development departments have expressed their inability to cut down price below $475. On the other hand, Sales department has shown a resistance for a price over $425.

Evaluating the impact of decision on our business, on our ability to meet customer needs and on our customer relations, it is recommended that TerraCog launches Aerial at a price of $475

[109 words]

Table of Contents
Situation analysis 3
The Problem 4
The …show more content…

Design and Development team designed Aerial as per specifications and subsequently the Production team came out with cost estimates of $550. Production team highlighted the fact that costs are high because of higher-end components and complexity involved in manufacturing. Concerns were raised by the Sales team about the price.

Subsequently, the Production team and the Design & Development team coordinated efforts to cut down on costs and ultimately came out with a price of 475$ for Aerial. In response, it was highlighted by the Sales team that Aerial would face competition from two of its competing products priced at $400 and $395. Hence, it would be difficult to sell Aerial beyond a price of $425. Sales team reasoned that in order to capture the lost market share, Aerial should be priced even lower.

Besides the price issue, customer experience was another key issue. Because of positive experience of customers in the past, TerraCog has had an advantage of word-of-mouth recommendations. Hence, it is imperative for Aerial to satisfy customer expectations to maintain its advantage. This makes the decision on Aerial even more critical to the company, both in short and long term.

The Problem
Should TerraCog launch

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