Monospace

Define the selling price and price strategy

Total Unit Expense = 18000 + 0.1 * 18000 = 19800

Minimum Selling Price (15% markup) = 19800 * 1.15 = 22770

Selling Price = 42000

Price Strategy: To maximize unit sales, To create a perception of brand quality or exclusiveness.

The market share of hydraulic elevators for low-rise buildings is very high. By setting the price of Monospace at 42000, we will maximize unit sales. (There is 50% additional cost for machine room setup). Monospace elevators use less electricity than hydraulic elevators. This price will be good even for existing low-rise buildings to move to Monospace.

Also, by setting a price higher than the hydraulic elevators a perception of brand quality is also maintained.

Break even if fixed cost is 3 million

Break Even(Q) = Fixed Cost / (Unit Price - Unit Cost)

= 136 units

Minimum Sales to Satisfy 15% margin

Total Cost = (Fixed Cost + N * unit cost)

Total Revenue = N * unit price

Total Revenue = 1.15 * Total Cost

N = 1.15 * Fixed Cost / (Unit Price - 1.15 * unit cost)

N = 180 units

List of information required for the estimation of demand

New Buildings that would require elevators

Old Buildings that would need replacement of elevators.

Preference to Energy efficiency.

Preference towards MRL elevators. (Machine roomless)

Demand Forecasting method

Market Research (Qualitative Forecasting Method) can be used to estimate the demand. Market surveys and interviews can be conducted to estimate the demand.

Elevator buying process and overall buying behavior

The elevator buying decision varies with the type and design of the building. Complex elevator systems are required for taller, costlier and complex buildings. The number of people involved in the decision making process also increases with the complexity of the building. The people involved in the decision...