Terra Cog

The TerraCog GPS Case Analysis

Background

The TerraCog is a manufacturer of high-quality global positioning systems (GPS) and fishing sonar equipment. The products are marketed to hunters, fishermen, and campers through specialty retailers. The TerraCog takes pride in its skill to value retailer and user feedbacks into the exceptional user driven product design. This user driven focus is responsible for the growth of GPS product line. However, the company is generally not first to the market. In fact, the company likes to enter market later with a product that is technologically advanced, incorporated by the feedbacks from users and retailers and therefore usually surpass the competition

Project Aerial: In 2006, a competitor of TerraCog, Posthaste, unveiled a GPS prototype “BirdsI”. The prototype was the first in market to capture actual satellite imagery. The TerraCog management after initial reviews of the product decided not to pursue development of a similar product. However, over the course of next several months, the “BirdsI” popularity grew with the consumers against the TerraCog’s management expectation. The TerraCog sales team reported an increasing customer and retailer demand for TerraCog’s version of GPS equipped with satellite imagery. Therefore, the Sales head Ed Pryor asked the TerraCog management to revisit their earlier decision of not pursuing a similar product. He cites that if no such product is introduced, the sales will not meet their targets, which will negatively affect his team compensation wise and also company in losing market share to the competitor. These repeated requests from Sales give birth to the Project Aerial, the TerraCog’s version of GPS equipped with satellite imagery.

Problem Statement: The project aerial is in jeopardy due to the inconsistent goals of the task group at the TerraCog. The sales would like to set price point that is competitive. However, such sales point is much lower than the cost estimates provided by...