Minnesota

Minnesota Micromotors Simulation MKTG 379 Allen Lin

I would not recommend increasing or decreasing the price of the micromotors. Segments A, B, C and Small customers are satisfied with the pricing. Segment D feel the price is still too high, however they are receiving the lowest price out of all segments and customer purchases have been increasing. Since segments B and C account for the lowest sales and seems relatively uninterested in doing business, I recommend decreasing the sales force for those segments by 5% in order to focus on the more profitable segments. For segment A, the largest drop in sales is due to the lack of new customer purchases. In order to help alleviate this issue, spending for acquiring new customers should be increased from 50% to 60%.Since the drop in retention of old customers is not as significant, lower spending should not affect old customers to a large degree. In general, customer complaints are related to defective products and not enough thermal resistance compared to its competitors. In order to improve thermal resistance, I recommend increasing the R&D for thermal resistance budget by $20,000 to $80,000. In order to cover this increase, a drop in the R&D budget for power to size ratio would be necessary. This decrease is also recommended because the companys current power to size ratio is better than that of its competitors. Lastly, because Segment A makes up the majority of our sales and have complained about defects, I would recommend removing one employees from the sales team in order to pay for manufacturing efficiency. This will also reduce manufacturing costs by 15% in the future and 30% if the budget could be $100,000.