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dress shoes normally cost around there. We were going to set a higher price but it had
consequences if higher prices were set. We wanted to start out strong and get our name out there
so we made Advertising $2,000,000 so more people would see our commercials and such visit
our stores to buy the product. We didn’t give Consumer Promotions as that would just make this
shoe not as valued. We gave $1,000,000 to dealers as well, with 10 Sales People. Our purpose in
the home market was to hit hard and gain most of the market share as fast as possible. For
Domestic, our approach changed, we made the shoe only $100 dollars while spending less to see
what would happen. Our Product Development for this Period was $1,000,000.
Our total sales reached to only 43,940 with an overall 47.5% Customer Satisfaction which was
severely lower than all the other teams. Our Net Profit reached $-3,383,643 which was
something we could not really understand what had happened. Our COGS was also lower than
other teams at the amount of $1,660,493. Our strategy had become weak and we knew we were
competing with teams who had lower prices which made it extremely difficult to earn any profit.
Our market share in the Home Market was 3.7%, while in the Domestic, it was 3.8%. Overall,
first year of the company always takes a huge hit. Plan to change strategy and focus on the next
year.
Decision Period 2
This second year, Our company, Sim Sidhu decided on making an increase in our Product
Development by a massive $1,000,000 from last year totaling $2,000,000. We really wanted to
build and spend more on the actual shoe so it is hands on with the quality of the shoe. Both the
Price in the Home Market and Domestic Market was decreased by $5 so we could hopefully
make back all the profit we had lost in year one. We also wanted to increase the level of
Customer Satisfaction with these Prices. We also decreased Advertising because the company
was trying to save money this year. We kept Consumer Promotions at $0 since we wanted to
keep the shoe valued. We lost less in Domestic so we changed the Sales People from 10 to 6
with only $300,000 in Dealer Promotions. We wanted to get back in the home market a little so
we increased Dealer Promotions by $300,000 from last year while keeping the initial Sales
People the same amount
As a result, we sold 78,035 total units with a 51.8 Overall Customer Satisfaction. Our Net Profit
was $-1,145,125 for this year making our Cumulative Net Profit $-4,528,768. Our goal was to
increase our Market Share value in both markets which has happened. 6.1% in Home Market
and 4.3% in Domestic Market. Overall, our strategy of going after the Home Market with an
increase in Dealer Promotions and decreased Price had brought our Market Share up. We now
needed to focus on both markets and increase Profit in both while not having negative return on
sales.