Data Management using MS Excel Case study of HerToo Inc.

Authored by Dr. Arpan K Kar HerToo is a market leader in manufacturing luxury mobile phones. Typically, the mobile phones are made with embedded jewels and costly metals like platinum and gold. The company positions itself with the tagline If you can spend thousands of dollars on jewellery, why not on a mobile phone?" The company has recently brought out a novel phone series called Dictator which focuses on the super-rich customer segment. However the product management team is facing a problem while pricing the product and requires a quantitative model to price the same. The pricing model is expected to bring out sticker prices for Silver, Gold and Platinum models, which will again be decided based on customer needs. Further, it will be used in the sales outlets of the firm, and so only the relevant input features should be available to the users. Now, the license category which would be required by a client would be dependent on 3 factors which are as follows: 1. Carats of gold used in the cover (provided in whole numbers only) 2. Carats of diamonds on the keypad (provided whole numbers only) 3. Connectivity features The customer is expected to input the requirements against these three factors. Further the factors for each license category are decided as follows:

Factors
Carats of gold used in the cover Carats of diamonds on the keypad Connectivity features

Silver
Less than 17 carats with a minimum of 12 carats Up to 3 carats with a minimum of 1 carats Simple voice calls and text messages

Gold
17-22 carats

Platinum
Above 22 carats

Above 6 carats up to a maximum of 10 carats Simple voice calls and 4G internet integration, both text and up and beyond calling and multimedia messages messaging features A customer provides input based on these 3 criteria and the sticker price is expected to be automatically generated. If for any factor the criteria for the next level of license are required, always the license is selected for the higher version. Now the costing for manufacturing the Silver, Gold and Platinum models are $5000, $7500 and $9500 respectively. Further, the customization costs are $1200, $1400 and $1700 for the Silver, Gold and Platinum models respectively. On top of the total manufacturing and customization costs, a profit per cent of 65%, 80% and 120% is targeted. Further, the sticker price is estimated in such a way that after giving a 10%, 12% and 15% discount for the Silver, Gold and Platinum models, the target profit percentages can be achieved. Create a pricing model using MS Excel to provide decision support to the pricing problem for the product management team.

3-6 carats