How Hp Used Tactics of the Japanese to Beat Them at Their Game

Q1. Before introducing its inkjet printers, did HP have to estimate the demand curve for them? Why or why not?

Ans1:HP understood American customers&computers better than the Japanese. HP did estimate the demand for printers in general & high quality printers in particular. While dot-matrix printers were ubiquitous, HP realized that ordinary computer users would soon demand high quality printouts of graphics & text. Furtherthe market survey would also highlight the shortcomings in the existing printers.HP knew that in the presence of dominant Japanese players like Seiko Epson Corp, NEC Corp, and others, HP cannot enter the printer market without a technological breakthrough.

Q2. When studying Epson before going after the Japanese-dominated dot matrix market, did HP try to determine which factors would have an important influence on the demand curve for its product? If so, what factors seemed to be particularly important.

Ans2:HP must have considered all the factors that would have an important influence on the demand curve for its product. The most important factors considered could be as follows:a) Price was an important factor; the US market demanded high quality prints at low cost. b) Poor print quality and colour: Epson's dot-matrix printers had serious flaws with respect to its print quality and colour. On the other hand, HP's inkjet printers gave good quality coloured prints. c) Rather than positioning the inkjet as a low cost alternative to HP's fancy laser printers, HP decided to position it as a substitute for Dot-matrix printer. d) When it came to marketing, HP copied the strategies of Epson; it asked retailers to place their inkjet printers in prominent spots. Further it tripled its warranty to three years.

Q3. H-P cut the price its black and white printer from $995 to $365. If the quantity of such printers that it sold per year increased tenfold does this mean that the (arc) price elasticity of demand for this product was about 1.8? Why or Why not?

Ans3:Price elasticity of demand measures theresponsiveness of the quantity demanded to a given price change.The quantity of printers