Essay about Back Bay Battery

The industry is dominated by a few large companies. For example, the A&D industry is dominated by the top players

That is, the fastest date to launch this product is in 1988. Three years is enough for the company’s competitors to react to their new projects. Also, in high tech communication devices industry, the products’ life cycles are usually very short, some products may out of dates within only few years. Therefore, this is a very serious issue that the company should be focus on.

Only later in the second year did I learn that self-discharge was also a very important feature (specifically to the Power Packs market).

While lithium batteries are not specifically included or exempted in the hazardous waste regulations, these batteries have some characteristics of toxic hazardous wastes. The reason for the uncertainty regarding the toxic characteristics of lithium batteries is because they can be effectively disposed as non-hazardous waste by discharging them fully. When completely charged or partially discharged, lithium batteries can be regarded as reactive hazardous waste due to the considerable amounts of un-reacted lithium in the battery ("Product Sheet", 2007).

The Back Bay battery simulation presents the managers with a dilemma of choosing between an established, profitable product and a new innovative opportunity. The decision has to be taken through investments in R&D and also make sales forecast for the coming year. Even though, the main aim of this exercise was to generate maximum profit but it actually is a way of analysing complex information and making decisions with the help of news flash updates about current trends amidst unstable market conditions. During the duration of eight years, a balance has to be established between a profitable stable product and an innovative product while keeping in mind the objective of generating maximum cumulative profit.

Companies can choose many ways to set prices, skimming price strategy where a company sets a higher price than normal and a penetrating price where low initial price is set. “Pricing

Market leaders: Duracel and Energizer (80% market share)  adaptation to consumer needs and valuable negotiating power with retailers

There’s an old pricing related joke that goes like this: A customer walks into a deli asking for the cost of a dozen bagels. The proprietor responds with $5.50. The prospective customer responds, "but the deli down the street sells a dozen bagels for $4.50". "Why don’t you buy the bagels there," the proprietor asks. "He’s out of bagels today," the customer replies. The proprietor retorts, "When I’m out of bagels, I’ll also sell you a dozen for $4.50". The customer pays $5.50 and receives the 12 bagels. Not only did the proprietor of the store know his competitor’s pricing, but he also knew the market price, as well as his competitor’s product inventory status.

In oligopoly market, each firm has substantial market power with high degree of interdependence. The key for success in a oligopoly market is to gain more market share than the competitors. Increasing the price can lead to loss of market share to the competitors, so in the oligopoly market, if a firm decreases the price, the other firms will always follow, but if a firm increase the price, the other firms will not follow. The demand curve is kinked.

The strategy for setting a product’s price often has to be changed when the product is part of a product mix. In this case, the firm looks for a set of prices that maximizes its profits on the total product mix. Pricing is difficult because the various products have related demand and costs and face different degrees of competition.

Battery pack: Over a lot of years the company has tested a huge number of batteries regarding the performance features. The company incorporated internal battery cell testing lab and also accumulated the database of extensive performance of the lithium ion vendors and chemistry types.

High pricing from the competitors create a pricing war by driving down the profit margins when increasing the market share.

Thus, it would increase the demand for low price batteries, giving a competitive advantage to big players such as Rayovac and Energizer whose prices are lower than Duracell.

ChargePoint has 31,000+ connected charging points. It has managed to provide quality service which leads to 98% renewal rate. This means 98% repeating customers.

Price, which is one of the most important elements of the marketing mix, can be difficult to get right. Pricing too high, or low, can negatively impact on customer satisfaction and revenue. Adopting a pricing strategy is necessary to achieve desired sales objectives (Chan & Wong 2005).