SUKETU

TEXTILE
MACHINERY
COMPONENTS
Group no. 3

Background
Planning to introduce spares and components
for new textile machinery.
The present business is highly profitable i.e.
Sales double every year.(1978 target was 30 lakhs)
There were large no. of small manufacturers.
STMC spares and components were high quality.
The company was using Cost+Margin Formula
for pricing their products.
For new line company management wants
pricing strategy which profitable to business.

(a)
Their price should be cost based
or what the market would bear?
() Their pricing strategy should be value based
pricing keeping the cost in mind
() Internal Factors: Marketing mix strategy
Price must coordinate with other mix elements.
Positioning: non-price(Quality)
Distribution: Pull
Price high and also margin
() Company also not to sale components at loss
and should maintain its POD as Quality.
() Present businesss sale is doubling every year.

The reasons are:

Quality is our POD
Our sales are doubling every year
Replacements costs are minimum
Induces good brand image
This strategy would be use for the new
product line also

(b)
Should they be in line with
prices of smaller manufacturers?
() No
() Companys positioning is Quality.
() They should differentiate from small
manufacturers.

(c)
Should they be competitive with
the prices charged by original
manufacturers for the spares?
() Certain extent
() Not compromise in quality and not to sale at
loss.
() Product comparison:
Superior:- Higher Pricing.
() We would do adjustments for cheap, normal or
expensive products to beat competition.

(d)
Should the price compatible with
what the mills wanted to pay?
() Not necessarily
() Product quality is high and also mill owners
not purchase base only on price.
() They consider satisfaction from previous
supplier and connection with this supplier.
() STMC spares and components are quality and
also few replacements needed and also save
replacement labor charges and less down time
for machine.