Microfridge Case

Question 1 What needs does MicroFridge meet? What value does it create? For Whom? Write a sentence, a "user benefit statement," that sums up succinctly the essence of what Bennett is offering, and makes it clear who is the target market.

Answer:

The Microfridge, with a devised electronic circuitry that shuts off power to the refrigerator whenever the microwave oven is switched on and pulls less than 10 amps of current, is a 1+1>2 device which can offer those who are in concern of using electronic appliances safely like college students and motel owners a safer, more convenient and inexpensive combination of microwave and fridge.

Question 2 How should Bennet price it to capture a share of that value for himself?

Answer:

First we analyze the background and target consumers of the company and a SWOT analysis is shown below.

Background:

 The idea about the Microfridge is innovative and creative. It manages to save the power efficiently, while the idea could easily be imitated.

 Companies like General Electric, Amana and other big domestic appliance manufacturers as well as the venture investing firm in Boston refuse to support Bennet because they think the idea owns a small market prospect and it worth little investment. But Samsung Electronics and Sanyo Electric are willing to discuss terms for offshore manufacture provided.

 Bennet himself resigned his job as a Boston computer salesman and sold their vacation home and other assets to go all out to forward his new concept, still Bennet is inexperienced and the quality of the product is uncertain.

 His target consumer, like the school authorities and the appliance retailers, does not feel like buying his concept.

Target consumers and the condition now:

 Students in the college. Most students (up to 52%) are likely to accept an increase of $75 per year to use a Microfridge, and at $50 per year the interest level is 90%. But the authority suspects the quality and the security of the product.

 Guests at small motels. Guests prefer to have the Microfridge to ensure their life quality.

 Appliance retailers. High margins exist.

Considering all the situations and background given, we strongly recommend 2 ways of price setting.

1. Bennet should set a relatively low price somewhat like a trial price at first to attract as much consumers as possible. Once the quality of the product is confirmed and the company has already owned