Minesotta Micro Motors
When taking in consideration the future selling strategy of Minnesota Motors we decided to choose between the two aspects we considered to be the more important ones: Price or Quality - Minesotta Micro Motors introduction. In a general way we observed that the segments that preferred quality over price (less price-sensitive) were segment A, B and C and the ones that preferred price over quality (very price-sensitive) were segment D and small-Volume customers. We decided to go for a business perspective focused on a quality premium product, which means that we will target mainly the segments A, B and C.
Segment A is one that pays particular attention to the size of the motor, department in which MM is already very strong, having a 19% market share here. Our strategy is to, when selling to this segment, increase a little bit the motors’ price, since they are not very price-sensitive, wanting to still maintain a good position in this segment. In terms of investment we will try to invest in designing a motor with higher thermal resistance, so that we can improve our market share both in segment B (thermal resistance very important) and C (thermal resistance and power-to-size combined).
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We predict that this investment would improve significantly our market share in the segment C and in a lower way on segment B. In terms of pricing here we would maintain a similar one in segment B and increase it in the segment C. Since this is the less price-sensitive segment, we could increase the price to compensate our investment. Regarding segment D, MM would still sell, but would not invest as much in advertising to that segment. The selling price in this segment would remain the same as it was previously.
To Small-Volume customers MM would decrease a lot of the investment done in it, mainly in the number of personnel. Our strategy consists in decreasing costs by reducing the sales team from 11 to 5 or 6 people, being able to reduce costs by almost 500. 000$ per year. We would still advertise and sale “door-to-door” in this segment (it is the second segment that more revenues produces) but we would do it in a less aggressive manner. We would also still keep the discounts in selling to large orderings.