Q1.

International marketing director Anthony suddenly received a phone call from

Ahmed Market, his Sales Manager in Istanbul said, “Tim what did I hear? I had
visited our customer, Cukuroba Electric, and they have been able to source
transformers in Croatia (Country in Balkans) at a 25 % reduction from the prices
we charge”. Calvana had been faced by this problem before. The company had a
good distributor in Croatia who was taking advantage of the rebuilding in Balkans.
To get the business, Calvana had offered a very low price and the distributor had
bought 100 large transformers.
Why doesn’t the company just have the same price everywhere? Which alternate
Pricing strategy can be used here? Comment.
Surely this type of price discrimination damages the reputation of the firm – so
why make problems for yourself? What should the strategy be of Calvana to
retain the customers?
Does the new market make it worth the small risk that someone will take
advantage??

 Q2. Bosch, is a German multinational engineering and technology company

headquartered in Gerlingen. The company manufactures small electric
motors in their products specifically Power tools and small appliances.
These small motors were earlier manufactured with die cast metal frames.
Die cast metal parts are essentially the result of molten metal poured into
mold, cooled and then removed from the mold. The metal raw materials
used often cost very less, $0.50 per pound. The alternate option is to use
Engineering Plastic, which costs $ 2.50 per pound.
 Die cast metal parts come out of the mold with rough surface.
 Motor frames require smooth bearing-like surface at many points. Critical
smoothening is required therefore.
 Casting does not produce holes with screw threads , machining step is
needed for each hole or screw thread.
 Surface treatment is needed to prevent metal from corrosion. Then it is
finally ready for use.
 Engineering Plastic is made by melting plastic and injecting pressure into a
mold. The nature of this allows the flow into tiny details of the mold.
 Intricate designs are possible, reducing the no. of parts attached, they get
molded as part of the motor frame. Screw holes are molded at the same
time.
 No corrosion.
 Though the total offering creates value based on material price, it comes at
a higher cost.
 The Buying centres and the OEMs are not ready to replace the metal for
Engineering plastic considering the cost factor. How should the Sales
Manager of Engineering Plastic manufacturer convince the OEMs and
Buying centres?
 As per the Sales Manager, The Total offering is examined and it is observed
that the Engineering plastic is cheaper than metal. Is he correct? Comment.
 Which Pricing strategy suits the best when you have Product with high price
and competing against the Product with low price. (Many customers
are loyal o the low priced product) Comment.