SENECA PAPER COMPANY We believe that Seneca Paper Company should keep the increased price of its products

as it is a leader-follower market and it can consider some recommendations which are given as follows. Recommendations: 1) Giving incentives to Jobbers: a) In the form of increasing the protection period to 45 days. b) Selling them the product at a discounted price if they agree to bind in a contract of buying at least some fixed quantity of the product. If they agree, then negotiation with the raw materials suppliers to decrease their price if we buy their products:
Cost price 12.16 10.944 11.9168 n/c Selling Price 12.8 12.416 12.672 12.672 Profit 0.64 1.472 0.7552 0.512 Margin as compared to last quoted price 130 18 -20

Current price Best case scenario Medium case scenario Worst case scenario

2) Introducing a new product which is in the Medium- Super standard category. Assume that introduction of this new product will convert the consumer of standard quality product to buy the new product.

New product at $12.8/bundle Best case scenario(40% conversion) Medium case scenario(10% conversion) Worst case scenario(less than 5% conversion)

Increase in revenues $.24/bundle $.06/bundle $.03/bundle