Terracog Global Positioning Systems Essay

Words: 1219
Pages: 5
Open Document
Letter of Transmittal
To Ed Pryor- VP, Sales Harold Whistler- VP, Design & Development Tony Barren- Director, Production
From
Emma Richardson- Executive Vice President
Date 17/03/2008
Subject: Pricing strategy & viability of “Project Aerial”
Enclosed report deals with the launching price problem being faced by TerraCog for its forthcoming GPS product Aerial, different options that are available to the company, selection criteria for evaluation and proposed solution along with action plan and contingency plan.

Executive Summary

There is significant disagreement over the proposed pricing of Aerial between the different departments.
Presently TerraCog has 3 options. It could offer the product at a price which is …show more content…
So the company’s sales team will have a difficult task to market it at a premium. Also, charging a premium for a product without any technical edge to its competitors might bring discontent to TerraCog's loyal customers.

C. Launch it according to schedule at $425.
1. Profitability
The margin will be very tightly squeezed at this price and as a result, the profitability will come under serious. Company will be having serious problem especially if the input cost increases in future. CFO will never agree to this price.
2. Increase in Market Share
With such aggressive price TerraCog will be able to capitalize on the growing market for handheld GPS. Also this price is only $50 more than its present full featured GPS but built on satellite imagery. So there is chance that some of our customers might shift to the new product.
3. Performance of the device
This price being very low there is no scope for TerraCog to improve its features and speed which is a little low. Earlier TerraCog introduced products which was technically superior to its competitors & thus, has built a momentum in the market. With this product, the company runs the risk of losing that distinction.

Recommendation:
Evaluation of all the options suggest that TerraCog should go after option (a) i.e. it should grant more time to develop a superior product and price it at a premium
Show More

Related Documents: Terracog Global Positioning Systems Essay

Terracog Global Positioning System: Conflict and Communication on Project Aerial Essays

TerraCog Global Positioning System: Conflict and Communication on project Aerial - Mayank Shah Background and Critical Issues: TerraCog is a privately held company specializing in high-quality Global Positioning Systems (GPS) and fishing sonar equipment. The company has a strong customer base of serious outdoor enthusiasts who value the durability and value-added features of TerraCog’s GPS units. In spring 2007, the company embarked on a project to enhance their high-quality GPS…

Words 2020 - Pages 9

Essay Week 8 Terracog

Richardson, the newly appointed vice president at TerraCog was concerned about a new product which is due to be launched in around 5 months. This new product was initiated due to a huge customer demand for global positioning system (GPS) with satellite imagery and also to regain their market share which was declined drastically as their competitors started selling GPS with satellite imagery which became a hit. Background: TerraCog is a Global Positioning System (GPS) and fishing sonar equipment manufacturing…

Words 356 - Pages 2

TerraCog Case Essay

Chiang MGMT 102 - Group 3 TerraCog Case Study TerraCog is a private company that specializes in Global Positioning Systems (GPS) and sonar equipment. They are currently competing with Posthaste, an up-and-coming company that has released the first satellite imagery GPS device. TerraCog’s reply is to be Project Aerial, an improved version of their already exceptional GPS product. The development of this project is left to Emma Richardson, Executive Vice President of TerraCog. As production of Project…

Words 1096 - Pages 5

gpas summary mGPS s Essay

firm that produces GPS systems for outdoor activity. The company is very successful at what they do. But recently the market changed on how GPS systems work. People want real picture and better graphic so they can see how everything looks on their GPS system. When the technology became available TarraCog didn’t care for it, but the competitors started taking the market share for BirdsI view and customers really liked the products. After seeing what the future of the GPS system was, TarraCog wants to…

Words 1406 - Pages 6