Reflection: Week 9

Spring Break (March 13-17): 

There was no blog post for last week because it was Spring Break! Even thought we had a break, I capitalized on the opportunity to start my Shark Plan project. As mentioned in my previous blog, I am studying a product named "GreenBox". GreenBox is a pizza box that is made entirely out of recycled material. Not only is it environmental friendly, it is convenient in that the top of the box transforms into 4 plates and the bottom of the box folds into a storage container for left overs. Thus far, I have focused on researching the business mission of the firm and conducting a situation analysis in which I identify internal strengths and weaknesses as well as external opportunities and threats. I will continue to work on sections of the plan as we progress through the remaining weeks of the semester.

Tuesday: 

SMART Project: Customer Discovery Survey

Instead of a traditional class meeting, Dr. Spotts gave our SMART Project groups the opportunity to sit down with him for a 15 minute meeting to discuss our customer discovery survey. Dr. Spotts gave our team valuable feedback and helped us refine our survey. Now that the final survey is approved, our team has begun interviewing people within our target market using the questions on the survey. 

In addition to helping us with the customer discovery survey, Dr. Spotts encouraged us to conduct expert interviews in which we visit local auto stores and talk with the manager about the steering wheel covers they offer, if any. I am responsible for talking with AutoZone and Advance Auto Parts. When conducting these expert interviews, we are also going to try to get feedback on our heated steering wheel cover. Our team plans to have this work completed by next Thursday so that we are able to start to analyze the data during class.

Thursday: 

Today in class, we sat with our SMART project group members plus the members from one other group. My team sat with the team members of "OK To Drive". In these groups, we picked questions out of a hat and discussed them at length as they relate to our SMART project. The intent of this exercise is for us to learn concepts related to pricing- a main aspect of marketing.

Here are some of the questions/ topics I found interesting:

Q: Is there a way to incorporate price bundling into your SMART product pricing?

A: Yes, we feel that the ThermoWheel can be priced in such a way that would bundle the price of the product and the price of installation. We think this strategy will be most beneficial if we decide to sell the product in an auto parts store.

Bundle Pricing is often used by fast food restaurants. Rather than asking consumers to pay for a burger, fries, and a drink separately, the restaurant will give them the option to pay one price for all three items.

Q: How price sensitive do you think your target consumer will be? Why?

A: We predict that our target consumer will be relatively price sensitive because a heated steering wheel is an accessory for your car, not a necessity. For that reason alone, I think we would attract less customers if the price was high. Another reason the ThermoWheel might be price elastic is because it is a new-to-market product and consumers might not be willing to try it if they perceive it to be overpriced.

In economics, the term price sensitivity is known as price elasticity. A product is said to be price elastic if the demand for it decreases when the price for it increases!

Q: Should your SMART team pursue a profit, sales, or status quo pricing objective?

A: We feel that our team should pursue a sales-oriented pricing objective because there is no established competitor in this market and the best way to gain market share would be to sell as many units of product as possible. We feel this is the best objective because generally speaking, larger market share also signals higher profits.

IMPORTANT: ThermoWheel as a volume business?

Based on our pricing objective, it is safe to assume that ThermoWheel will generate a volume business. From a Shark Tank episode a few weeks ago, we know that a volume business is when there are a lot of sales at a relatively low price. Each individual sale does not bring in a significant amount of profit. However, your product's target consumer base is so broad that you are able to make money through sales numbers. 

What is the difference between strategy and objective? 

A small point of discussion in class today was the difference between a pricing strategy and a pricing objective. One of my classmates explained this concept nicely. She said that a strategy is how you go about achieving your objective and that an objective should be thought of as an end goal. I think this concept is important to understand.