Terra Cog Case Study
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 Options 4
Criteria for Evaluation 4
Evaluation of options 5
The Recommendation 7
Action plan 7
Situation analysis
TerraCog is a relative successful company specializing in GPS and fishing sonar equipments. TerraCog is known for its ability to convert user feedback into products which outmatch its competitors in addressing customer needs. GPS products offered by TerraCog are lauded for their durability and value-added features.
In 2006, Posthaste, a competitor, launched a GPS product called BirdsI which used satellite imagery as display. BirdsI has a visual appeal to the customers and has shown impressive sell-through rates last year. Consequently, customers have been demanding a product having satellite imagery display from TerraCog. In response to this, TerraCog decided to launch a product called Aerial. Both, the President and the Board of directors of TerraCog have shown a keen interest in ensuring a successful launch of Aerial.
In order to keep costs lower and speed up the launch of Aerial, TerraCog team decided to redesign the product within the existing GPS framework. Given that Aerial was expected to be priced at a premium to its competitors, it was decided to retain the same high end-functionality and
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 Options 4
Criteria for Evaluation 4
Evaluation of options 5
The Recommendation 7
Action plan 7
Situation analysis
TerraCog is a relative successful company specializing in GPS and fishing sonar equipments. TerraCog is known for its ability to convert user feedback into products which outmatch its competitors in addressing customer needs. GPS products offered by TerraCog are lauded for their durability and value-added features.
In 2006, Posthaste, a competitor, launched a GPS product called BirdsI which used satellite imagery as display. BirdsI has a visual appeal to the customers and has shown impressive sell-through rates last year. Consequently, customers have been demanding a product having satellite imagery display from TerraCog. In response to this, TerraCog decided to launch a product called Aerial. Both, the President and the Board of directors of TerraCog have shown a keen interest in ensuring a successful launch of Aerial.
In order to keep costs lower and speed up the launch of Aerial, TerraCog team decided to redesign the product within the existing GPS framework. Given that Aerial was expected to be priced at a premium to its competitors, it was decided to retain the same high end-functionality and