Booth Associates

Uncertainty about customers’ wants and needs complicate our decisions about revising our present products and services or introducing new ones. In either revising or introducing new products or services we don’t know what features to include or how to price the product.Marketing

The following situations are commonly found in the marketing areas of many organizations.

  • We wonder how our customers feel about our products compared to those of our competitors.
  • We have considered developing and marketing a new product, but we have doubts about whether it will appeal to potential customers.
  • There are many features that we could add to our new service, but we don’t know which ones are really important to our potential customers.
  • We don’t know how to price our new product. If we price it too high, it will fail to sell, but if we price it too low, we will lose potential profits.

Profits Through Increased Market Share

The following is an example of how Booth Associates can save you money in the marketing area of your company.

A software company was considering producing a new product that would be in direct competition with a product from their main competitor. However, it would also be in competition with one of their own existing products. They wondered what features to include in the new product to compete most strongly against their competition without decreasing sales in their own competing product.

Analyses were used to determine that there are two features that they could add to the new product that would be highly desirable in the marketplace. These two features would compete strongly with their competitors but would have only minimal impact on their own, existing product.

They also found that a third feature, which they had considered adding to the new product, would have made their new product do even better against their competitors, but it would have had a devastating effect on their other product. So much so, that it may have made their other product non-marketable.

They estimate that the market can produce about $11.4 million dollars in sales per year. Their current product has only a 28.5 percent market share, while their competition has the other 71.5 percent. The analysis indicates that the new product will gain about 40 percent of the competitor’s market share by the end of the first year. It will have almost no effect on their own existing product. The anticipated first-year gain will be about $3.26 million.
 

Pricing for Maximum Sales

The following is an example of how Booth Associates can save you money in the marketing area of your company.

A company was introducing a new prepared dessert mix into the market. They knew that there were many other products for the consumer to choose from, but their new product was considered a European gourmet dessert. The development of the product had been expensive, and they hoped to recover the developmental costs soon. The big question was, "How much should we charge?"

An analysis permitted them to discover how the public would respond to the new dessert. They found that many dessert buyers were interested in the new dessert, but they were not willing to pay enough to make production worthwhile. A general marketing effort seemed too expensive for the anticipated return.

However, they also discovered that there was a segment of the population who was interested in the new dessert and for whom any reasonable cost was not an important consideration. They found the price that would be acceptable to this market segment, and they tailored an advertising campaign directly to this group. Advertising costs were much lower than they would have been if a general campaign had been undertaken, and they were able to price the product just below the point at which sales would have been reduced.

Pricing strategies are important! Knowing the correct target audience for advertising can make or break a campaign.
 

How Booth Associates Can Help

If you recognize any of these or have other problems in your company, we can help you. We have helped many companies improve their bottom line, and we’ll do the same for you. Please see our list of services and contact us.