Module 3 SLP 3 CHOICES

There are three main products made by the Clipboard Tablet Company the X5, X6 and the X7. The X5 is the oldest of the three products and has been on the market for three years. The product has matured such that customers are not worried about the performance of the device. The X6 is the second product produced by the institution and has been in the market for two years since 2009. The consumers of this product care more about the performance and efficiency of the product as opposed to price. The most recent product is the X7 which has been on the market for only one year. The products customers care about both performance and price.

Of all the three products, the X6 is the most expensive and retails at 430$ per unit. The X5 retails at $285 per unit while the X7 is the least expensive at 190$. The X5 is the product with the most sales due to the awareness and brand trust it has established in the market. The X6 follows in terms of performance in the consumer market while the recently launched product is the last with a non-gradable performance due to the lack of sales in the previously concluded financial year.

Financial review

X5

The tablet competes in a relatively saturated market which stands at 15%. This means that the level of competition is fairly high given similar products have already been introduced in the market. The X5 serves a customer base of 1,035,000 out of a targeted 6,000,000 customers for the year 2011 ("Tablet Development Sim", 2016). The product performed fairly well in the recently concluded financial year having recorded an impressive 882,779 new customers while retaining 86,250 through repeat sales. Therefore, the total sales stood at 968, 979 ("Tablet Development Sim", 2016).

X6

The X6 operates in a relatively less competitive market than its predecessor. With an initial target of 6,000,000 clients, the product managed to reach a base of 550,000 in a market saturated at 8%. The product has a higher number of new customers than returning clients which are an indication of its appeal to early adaptors in the product life cycle. With an average of 562961 sales in the year 2011, the product is the second selling product from the company catalog

X7

This was the latest product to be released by the company as at 2011. The product was designed to attract a larger segment that cares about pricing and quality. The product was to serve 17,500,000 clients with an installed base of 340,000. However, in its first year of production, the product did not manage to make any recordable sales. Therefore, in the product sales rankings, the X7 was the last with no sales. The X6 followed the X5 closely with above average sales while the most sold product was the X5 which generated sales worth 968,979$ ("Tablet Development Sim", 2016).

Market review

All the products had similar trends regarding overall financial performance related to customers. For instance, the best performing product the X5 had a majority of its sales emanating from new clients, the early adaptors in the product life cycle. However, regarding retention, the product has failed to sustain its initial clients and as a result recorded lower sales margins than would be the case if a majority of its initial clients were retained. The initial X5 customers were 882,729 while the retained customers through repeat sales were 86,250. This exposes a loophole in the products marketing strategy due to its inability to retain customers after initially attracting large numbers.

The second product is the X6 which records similar tendencies to the X5. Although the market is only 8% saturated the product fails to retain most of its initial clients. This can be attributed to the high cost of purchase tagged to the product. Consequently, the early adaptors might have shifted allegiance to other products with better prices and specs as well. The X6 only managed to retain 46,943 clients out of over half a million initial sales. Also, the X7 recorded a poor performance for the financial year with no sales recorded despite initial investment.

Alternative strategy

The products are not performing to the required company standards, and this can be attributed to the lack of adequate research on market preferences and product development. Therefore, products can reach out to larger markets and maintain a solid market presence if adequate research is done on the needs of ever changing client needs (Agarwal & Ansell, 2016). Most of the initial purchasers are early adaptors who prefer jumping on to new products. However, the segment of early adaptors should not be depended on as a consistent base. This is because early adaptors are characterized by their lack of loyalty to specific brands. The early adaptors instead can be used to create awareness and should be maintained until the growth stage.

Change in pricing

The pricing strategies of the products should be reviewed. This is primarily due to the unattractive return rates exhibited by all the products. For instance, the already developed product the X5 has been on the market for over three years. Consequently, this represents a challenge in two ways; first, there is a need for changes in pricing to increase retention rates. The need for changing the overall pricing policies is due to the various segments targeted in the consumer market. The safest way to transition from relying on early adaptors is discouraging their efforts by targeting a less dynamic segment in the growth stage. The growth stage should be characterized by strategic pricing to boost the product marketing prices (Harris, 2011). For instance, the institution can rely on indirect marketing strategies by giving price and bulk discounts. This will help retain large numbers of clients especially those preferring either quality or fair prices.

Modifications to the X5 over the years

The X5 is the company`s flagship product and as a result, should be monitored across all the stages of its life cycle. First, the pricing strategies should be modified to accommodate the needs of the loyal customers. Most of the X5 consumers appear to be disinterested in the product upon initial purchase. Moreover, most clients do not fancy static products that do not alter prices and offer promotions. The first move will be to slash the initial prices of the product from $285 to 277$. The significant slash in prices will not affect the products since it is already well progressed in its life cycle. This move will help keep the clients on their toes since they will see the need to take advantage of the slashed sales. For consistency, the products will retain the new price levels for a specified duration preferably two months. Afterward, the product should retain its initial price until the next financial year where it should change to keep the clients loyal to the product.

Modifications to the X6 over the years

As earlier mentioned, the X6 clients care more about the performance of the product. Therefore, the R&D allocations should be significantly increased to ensure proper research is conducted on the product. The X6 is the most expensive of all the products of the company, but clients do not mind buying the product at high rates as long as its efficiency and performance is top notch. Consequently, the R&A allocations should be prioritized when it comes to this product. Since clients prefer quality over low pricing, additional research should be conducted on the product to ensure it is designed and produced to satisfy the various need of its clients. Therefore, the X6 requires more finances in its research departments to increase its marketability and attractiveness to clients. More so, this move will help retain clients since their respective preferences will be considered throughout the production process. It is important, therefore, for research to be conducted on clients` preferences, market trends, and technological advancements. This will enable the product to compete at a high level throughout the years while retaining a loyal base of customers.

Modifications of the X7 over the years

The X7 was the latest launch of the company and by 2011, had recorded no significant sales. The product`s clients, however, were keen on both pricing and performance. Therefore, this means that the production budget allotted for this product should be significantly higher than the initial products. This means that additional attention should be accorded to this product to ensure its design is favorable for the target market. First, research should be conducted to determine the most appropriate prices for the product. If the X7 is incorrectly priced, its potential clients will go for other products manufactured by its competitors. Similarly, the R&D budget should be increased to cater for all the additional research required to ensure the product satisfies all its clients` needs. Also, the prices of the product should be altered over time through promotions and discounts. This will help keep up with customers who are always scouting for convenient deals. The second year should see the price slashed for around two months to attract loyal customers. Afterward, the product should be customized to suit potential client needs through researching probable trends. This will help justify new prices and the various promotions over the years.

All the products require additional attention to correct the previously done marketing and product development errors. The X5`s appeal to the clients is its prices. Therefore, the management should carry out additional research on competitors` prices to determine the potential pricing strategies that can increase the sales of the X5. However, the X6`s appeal to clients is in its quality. This means that the organizational must provide adequate resources to the marketing and production team to ensure that technological advancements are incorporated in the new products. The X7 requires extensive marketing strategies which are possible only through further research. As a result of this, the company administration should provide necessary research materials for the product. Also, since the product`s appeal to customers is in the pricing function as well, it is important for the products prices to be reviewed professionally after every quarter in a financial year; this can be through discounts, promotions and price slashes as well.

References