U3-X Pricing Case Study

The U3-X should be marketed and sold Business to Business. I think targeting companies that have large areas that need to be traveled quickly will be the most effective market. This segment could include large hospitals, manufacturing plants, theme parks and universities. The staff must be able to navigate quickly from one side of the grounds to the other and the use of cars or walking is not always an option. The type of employees who would use this product at these companies could include security, maintenance employees or high level executives and presidents. The target companies would have locations that sit on 30 or more acres. The companies would be established and have likely been around for a minimum of 10 years and employee at least 1,000 people in one location.

I would choose business to business markets in order to sell 50,000 of the U3-X in the first year. While consumers may eventually buy this product, I believe it would be a difficult sale because there are only small markets of consumers who would have a steady use for a product like this and who would be able to pay the price we must charge. By choosing a business to business tactic, we will be able to charge a higher price and therefore have a higher price margin in order to recuperate some of the research and development cost. Education should also play a role in this decision; it is much easier to educate the buying team of a company, rather than to educate individual consumers on the new item. We will be able to target a very specific, small market and provide a more personalized approach. Another great advantage of selling to large corporations is that they will purchase the items in large quantities. We will also be able to grow our business once we have a relationship with these companies so our plan to develop this technology further will also be benefited by these relationships. We can listen to what our customer’s want and use their input to develop new technologies.

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