Price Promotion Policy

This sort of an orientation towards analysis of this case, however, would entirely overlook the real issue involved inside the case.

The main issue involved in this case could be the determina tion by Hartmann Luggage of just what type of company it needs to be. Does Hartmann need to be perceived by the buyer as the leading prestige manufacturer and marketer of premium qual ity luggage? Alternatively, would the business prefer to create a challenge for ones leadership of the luggage industry? If Hartmann wishes to become perceived as the leading prestige manu facturer and marketer of premium top quality luggage, the company need to preserve a prestige pricing strategy. On a other hand, if the company wants to produce a challenge for marketplace leader ship, it requirements to adopt a strategy created to increase marketplace share. As soon as this determination is made, the time will be right to assess the assumptions underlying the consultant's report, and to determine the importance to the company of sales (price) pro motions. At this time, the dilemma could be the determination of what sort of company Hartmann will strive to be.

Prestige goods are generally of the greater top quality than are other products and solutions within the exact same genre. Even as soon as the true quality of prestige items is not higher, there exists a perception of higher high quality in between individuals folks included inside appro priate target market. Greater quality, or the perception thereof, inside the context.

 

In most cases, cost differences are higher than quality differences. The automobile industry offers and instance of this situation. Few automotive experts challenge the conten tion that a Cadillac "Seville" is really a higher quality automobile than could be the Honda "Civic," or how the Mercedes "300" is often a higher high quality automobile than could be the Cadillac "Seville." Most automotive experts, however, tend not to agree that either the approximately $20,000 retail list price differential among the Honda "Civic" and the Cadillac "Seville," or the approxi mately $20,000 retail list price differential between the Cadillac "Seville" as well as the Mercedes "300" are accurate reflections of high quality differences in between the a couple of pairs of automobiles. Further, if one have been to compare the approximately $40,000 retail list price difference among the Honda "Civic" and the Mercedes "300" towards quality differences between the a couple of automobiles, the the divergence in the measurement of the two variables would be revealed as actually absurd.

Prestige items marketing, is accompanied by a much higher price.

The continued use by Hartmann of sales (price) promotions will trigger a deterioration of buyer perceptions as towards the 6quality level of the company's products. The strategy, how ever, would likely fail as an help on the company from the pursuit of the larger market share, since each Samsonite and American Tourister would react to this kind of a move using a strength of effort which would doom Hartmann.

3. The company should seek profit improvements primar ily through improvements in production efficiency, and through improved efficiency in materials purchasing.

It is advised that Hartmann make a choice to remain as the leading manufacturer and marketer of premium high quality luggage inside United States. With this determination made, it's additional advised that the company eschew any further forays into sales (price) promotions.

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