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Dominion motor company

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Dominion motor company

  1. 1. A Case study on DominionMotor CompanyPresented By:- Aniket Harsh- Arjun R.K- Deepa Sundaram- Kumar Abhishek
  2. 2. Alternative 1: Selling 10 hp motors at the priceof 7 ½ hp motors Effect on the profit from 10 hp motors0 5 10 15 20 25 30 35 40 45price of 7 1/2 hpcurrent price of 10 hp
  3. 3. Alternative 1 (Contd.) Total operating cost per motor tocustomer including electricity charges:0 500 1000 1500 2000 2500 3000 3500 4000DMC 10 hpCompetitor 7 1/2 hp
  4. 4.  Benefits:- Counters immediate loss of customers.- If aggressively marketed, will prevent loss to Dominion. Cons:- Short term solution.- Increase Operating cost per motor for the client by asubstantial 18%.- Will lead to eventual if not immediate loss ofcustomers.- Reduce company profits.
  5. 5. Alternative 2: Modifying 7 ½ motor toincrease torque Benefits:- Will provide a ready product to put forth to meetcompetition.- No additional capital investment.- Lesser time for development- Lower operating cost for customer. Cons:- Not conducive to the health of the motor market onthe whole.- Might lead to safety and performance issuesirreparably damaging brand value and customer trust.- Reluctance in customers towards using non-standardized products.
  6. 6. Alternative 3: Coming up with a 5 hp motorthat satisfies the torque requirements. Total sales considering 60% market capture and 80% ofmotors being sold are the new 5hp motors. (Totalmarket= 1000 motors per year)( 10 hp motors being sold at 7 1/2 hp price with 50% market capture and 80% motorsbeing sold are of 10 hp)01000002000003000004000005000006000005 hp 10 hpTotal SalesTotal Cost
  7. 7.  Total Cost to customer for purchasing and operatingthe 5 hp motor versus competitor’s 7 ½ hp motor.2300 2400 2500 2600 2700 2800 2900 3000DMC 5 hp motorCompetitor 7 1/2 hp motor
  8. 8.  Benefits:- Will provide market superiority and increased marketshare.- Satisfied customers.- Value addition in terms of increased respect fordemonstrating agility and customer need sensitivity. Cons:- Product will not be ready in time to capitalize on thestart of the season boom.- Loss of customer base in the intervening period.- Loss of brand respect for being ranked behindcompetitors.
  9. 9. Alternative 4: Challenging Bridge’s findings Benefits:- If DMC’s testing results prove the fallibility of thepremise for ranking, it will restore customer confidenceand reassure them that they are getting the best ofproducts. Cons:- Unproductive. Loss in customer base, sales and profits inall genres of DMC products.
  10. 10. Solution (The Fifith Alternative): Reduce selling price of 10 hp motors to that of 7 ½ hp motors. Simultaneously begin development of 5 hp motor having torqueequivalent to 10 hp motors. Assign the marketing team to reach out to rig supervisors and engagewith them to promote the 10 hp motors at reduced selling price andat the same time spread information regarding 5 hp specialty motorwhich will be shortly available. Engage top management of Hamilton to present the features of themotor under development. Offer them a one time introductory priceof 1045$ on pre-booking of the new motor. If possible, get backing from NEMA for the performance of the 7 ½ hpmotor and communicate it through proper channels to customers forreassuring them. Parallely conduct testings to challenge the premise of rank awarded. Ifsuccessful, it will reaffirm customer belief in DMC products and assurethem that they are buying from the best.

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