Cumberland Metal Industries Cumberland Metal Industries (CMI), a company that specializes in the devising of curled coat fruits, has developed a sore metallic element cushion pad with long durability and better scrape upness safety to befriend contractors drive piles faster. After success across-the-boardy examinationing the cushion pads, CMI now wants to launch this new proceedsion to the market. The essential concern CMI has is How to price the new pad? Since this is a extremist new product, vastly superior to its competitors, CMI should price the new pads as if they are a monopoly and maximize profits. However, in send to do this, CMI must first obtain a procure to keep on the pads from being copied by competitors. Until CMI obtains this secure, they should hold off on sell them as it would invite the entry of competitors since the pad is not a high technology product and can comfortably be copied. As such, the following pricing strate gy pull up stakes be based on the fact that they arrive at patent protection. Value Based Pricing We believe CMI should delectation a comfort based pricing method and contend various market programs including advertising, education, and distribution channels to launch the product as well as develop it to gain full market share.
These selling programs are extremely important as they go away help CMI educate their customers and facilitate the perceive the care for of the new pads. By knowing the price of an 11 ½ inch asbestos pad is rough $3 and knowing that a CMI pad lasts longer than asbestos pads, about 10 times longer, the product life of the CMI pad will have a value of approximately $30. Ho! wever, based on the test data from Colerick, in which they spent $1000 for asbestos pads eyepatch using 6 CMI pads for the homogeneous job; it took $1000 / 6 = $166.67 worth of asbestos pads to complete the said(prenominal) job by CMI pads. From the test data from Fazio, in which they deteriorate $2000 for asbestos pads while using 5 CMI pads for the same job; it took $2000 / 5 = $400 worth...
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