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Using Pricing Methods and Strategies in Reference to Segway

Provide and overview of marketing especially Pricing methods and strategies, and review the pricing of the Segway as an intrinsic component of the marketing strategy for that product. Would your pricing and marketing strategies have been any different, and if so, in what way and why?

The Situation

Kanellos, M. (2001, Nov 29) More Ginger details may be coming at News.com. Viewed February 22, 2008.

Reuters, (2001, Dec 3) Mystery of Ginger ends at news.com. Viewed February 22, 2008.

Harmon, A. (2001, Dec 3). An Inventor Unveils His Mysterious Personal Transportation Device at newyorktimes.com. Viewed, February 22, 2008.

BBC (2002 Feb 19). Hyped scooter goes on sale at news.bbs.co.uk. Viewed February 22, 2008.

Ojeda-Zapata, J. (2008, Jan 5) Going somewhere? McClatchy-Tribune Business News. Retrieved from Proquest database, February 22, 2008.

Jackson, G. (2007, Dec 19). Segway's new way. McClatchy - Tribune Business News. Retrieved from Proquest database, February 22, 2008.

Jay Jochnowitz, J (2007, Aug 16). Push for Segway use ends at governor's desk. Knight Ridder Tribune Business News. Retrieved from Proquest database, February 22, 2008.

Kawamoto, D. (2003, Sep 29). Segway sales haven't transported maker at News.com. Viewed February 22, 2008.

techsoc.org (2008). Today in Technology History at techsoc.org. Viewed February 22, 2008.

Gizmodo.com, (2008). Segway at gizmodo.com. Viewed February 22, 2008.

BACKGROUND: In 1985, UK entrepreneur, computer manufacturer and inventor Sir Clive Sinclair launched his latest new product, one that would revolutionize the world of personal transportation. The C5 was positioned as the world's first commercially produced electric car and priced at equivalent to $520 (at 1985 exchange rates). It was an unmitigated commercial disaster. Before the end of the year the price had dropped to the equivalent of $190 to clear unsold stock. In total 12,000 were produced and the C5 entered the record books as one of the worst marketing blunders of all time.

Fast forward to the Twenty First century, where we know better, right?

In 2001, U.S. entrepreneur and inventor, Dean Kamen launched his latest new product, one that "would be bigger than the internet", (BBC, 2002) and revolutionize the world of personal transportation, a claim supported by fellow inventor and hi-tech guru, Steve Jobs, co-founder of Apple Inc. According to techsoc.org, a company Press Release of the time described the Segway as:

"the first self-balancing, electric-powered transportation machine. With dimensions no larger than the average adult body and the ability to emulate human balance, the Segway HT uses the same space as a pedestrian, and can go wherever a person can walk. The Segway HT will allow people to go farther, move more quickly, and increase the amount they can carry anywhere they currently walk." (techsoc.org, 2008)

Amy Harmon writing in the New York Times indicated that Mr. Kamen saw the product as "a transportation choice that fills the niche between walking and driving", and that:

"the Segway could cause cities to be redesigned, help wean the world from oil dependence, compress time and space for pedestrians and raise productivity for corporations and government agencies" (Harmon, 2001).

The elimination of poverty and the achievement of world peace were surely just around the corner. Prices were expected to be around $3,000, which was regarded as $2,000 too high by one commentator (Harmon, 2001). In 2003, sales were reported to have reached six thousand, far short of the expected sales figures of 50-100,000, when all sold Segways were recalled, (Kawamoto, 2003).

In 2008, a university professor browsing e-bay found a brand new Segway was priced at $4,998.95.

In answering the question make reasonable assumptions, (clearly you won't have the same information available to you as the actual manager, e.g. about costs, but make some assumptions and follow through in your analysis).

Please provide a three page paper that answers the above questions, I will need to add more information as I see fit. Thank you for your assistance.

Solution Preview

The response addresses the queries posted in 968 words with references.

//Before discussing the other sections of the assignment, it is essential to gain some knowledge about the company. This is an introductory section which will discuss about the company and its business: //

Introduction

Segway Inc. Is involved in providing upright and self balancing people mover by the name of Segway Human Transporter (HT). It was developed by an entrepreneur and inventor Dean Kamen in 2001. It was a not less than a revolution in the world of personal transportation. Segway HT is a self balancing transport machine that uses electric power. It provides quick movability to the people and they can use it wherever they walk (Harmon, 2001). Segway is also using one of the pricing methods.

// Above we discussed about the introductory part of company and now as per the requirement of the assignment, the next section will discuss about various pricing methods and strategies in general://

Pricing methods & Pricing Strategies

Pricing is an important factor for an organization and marketing strategy because it is the only element of marketing mix that is accountable for revenue generation. Price setting is not an easy task and it involves various internal and external factors that influence pricing (Kotler, 2002). It is the biggest challenge for the companies. Pricing strategy involves a series of steps that assist the company in setting the price of a product. These steps are as follows:

Selecting the pricing objectives: The first thing to be decided by the companies is their objectives that cover survival, profit, return on investment, market share, status quo and product quality. A clear understanding of its objectives will assist the company to determine the pricing of a product. These objectives enable a company to gain market share or long term sustainability in the market.

Determining Demand: Companies must ...

Solution Summary

The response addresses the queries posted in 968 words with references.

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