symphony coolers

8/11/2019 Symphony Coolers

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SYMPHONY COOLERS

PREPARED BY


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MARKET ENVIRONMENT

Demand for room coolers on the rise

Seasonal Sales, majorly accrued to the unorganized sector

Normal Room cooler costs between Rs. 1500-5000

SCSPL achieved product differentiation through innovation- Use of Fibre rein

plastics


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SITUATION AT HAND FOR SCSPL

SCSPL achieved sales of 20000 units of

Symphony room coolers through retail and

10000 units through other brand holders in

1991

Profit margin of10% in previous year

Planning product line extension by

introducing two Variants

Koolers in lower price category

Harmonica in premium category

Pricing strategy for new variants

Constraints

Maximum capacity 40000 units

Minimum cannibalization of existing bra

Cheap lookalikes and competitors in low

category


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EXISTING FINANCIAL ANALYSIS (199

When selling through dealers When selling to competitorsRetail Price 5000 VC 2

Tax @10% 500 Markup

SP for dealer 4500 SCSPL selling price 2

Dealer Margin 1000 Number of Units 10

SCSPL selling price 3500 Sales through competitors 24150

Number of Units 20000 Contribution 3150Sales through dealers 70000000

Contribution 28000000

Total Fixed Cost 21735000

Total Profit 9415000

Profit Margin 10.00%


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PRICING STRATEGY

Steps Kooler Harmonica

Pricing objective Market Penetration Product Quality Le

Estimate Demand On basis of past year sales

Estimating Costs Next Slide

Analyzing competitors prices Rs. 2000-3500 Rs. 5000-8000

Select a pricing method Going rate pricing Perceived value pr


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ASSUMPTIONS

Past year sale trend continues. Expected sales at least 30000 units overall

Half of the 60% consumers who found harmonica better than symphony mig

harmonica


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PROFITABILITY ANALYSIS (1992-93

HARMONICA KOOLERS SYMPHONY

VC per unit 2300 1800 Retail Price

FC 550000 450000 Tax @10%

Selling Price 5999 2999 SP for dealer

Tax @10% 599.9 299.9 Dealer Margin

Sp for dealer 5399.1 2699.1 SCSPL selling price Dealer margin 1199.8 599.8 Number of Units 1

SCSPL selling price 4199.3 2099.3 Sales through dealers 7000

Contribution 2240

BEP 289.5803717 1503.508 Profit 66

No of units sold 6000 9000

Profit 10845800 2243700

Total Sales 128686500

Profit Margin 10.69%

% increase in sales 36.68%


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FINAL DECISION

Retain price of symphony at Rs. 5000

Introduce Koolers at Rs. 2999 to compete at the lower price level

Introduce Harmonica at Rs. 5999 to encash on the premium quality

The difference between prices of three variants is kept large to

Minimize cannibalization

Cleary define categories

Discontinue supplies to other brand holder (A, B and C)


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THANK YOU

symphony coolers

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