A firm that is marketing multimillion-dollar waste-water treatment systems to cities has been unable tosell a new type of system. This setback has occurredeven though the firm’s systems are cheaper thancompetitive systems and meet U.S. EnvironmentalProtection Agency (EPA) specifications. To date, the firm’s marketing efforts have been directed tocity purchasing departments and the various stateEPAs to get on approved bidders’ lists. Talks withcity-employed personnel have indicated that thenew system is very different from current systemsand therefore city sanitary and sewer departmentengineers, directors of these two departments, andcity council members are unfamiliar with the work-ings of the system. Consulting engineers, hired bycities to work on the engineering and design fea-tures of these systems and paid on a percentage ofsystem cost, are also reluctant to favor the new sys-tem. (a) What roles do the various individuals playin the purchase process for a wastewater treatmentsystem? (b) How could the firm improve the mar-keting effort behind its new system?
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
A firm that is marketing multimillion-dollar waste-
water treatment systems to cities has been unable to
sell a new type of system. This setback has occurred
even though the firm’s systems are cheaper than
competitive systems and meet U.S. Environmental
Protection Agency (EPA) specifications. To date, the firm’s marketing efforts have been directed to
city purchasing departments and the various state
EPAs to get on approved bidders’ lists. Talks with
city-employed personnel have indicated that the
new system is very different from current systems
and therefore city sanitary and sewer department
engineers, directors of these two departments, and
city council members are unfamiliar with the work-
ings of the system. Consulting engineers, hired by
cities to work on the engineering and design fea-
tures of these systems and paid on a percentage of
system cost, are also reluctant to favor the new sys-
tem. (a) What roles do the various individuals play
in the purchase process for a wastewater treatment
system? (b) How could the firm improve the mar-
keting effort behind its new system?
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