.. , the quality of the product isnt so good, it isnt yet enough developed Need three months of practice and training for children, it may take even years Impossibility to predict before a surgical operation how each individual patient would respond only 50% were eventually able to understand speech without lip reading, and could even use the telephone New product development could not be heavily publicized because users would put off any buying decision when they anticipated a model change, which caused serious inventory problems They have a poor return on assets due to the fact that only 50% of the production capacity is used The price is relatively high, $30,000 including hospital and surgical expenses (three times the price of 3M) Most patients paid for their own new units, or updates, in US because the insurance companies refused to pay Worldwide awareness among potential users was only 5% Opportunities Huge potential of growth (50,000 more units) New updates Still growing in Europe Lobbying from deaf community to government, may open new market Improve reliability of the units and the performance of the system Find new uses of the Cochlear technology (implantable hearing aids, tinnitus, and functional electrical stimulation FES), and expand them Potential for an implant behind-the-ear system Increase potential users awareness of the existing product Receive the FDA approval for children, and therefore exploit this segment Threats Competition from Symbion and Minimed Drop in the sales of the hearing implant device The deaf pride movement, anti-Cochlear Growing competition from University medical schools 4. Alternatives Raising the price would be dangerous due to Symbions competition, which is producing at the same performance and price criteria. Therefore if Cochlear decides to raise the price, it wouldnt be anymore the most attractive on the market. In addition, the risk of losing 25% of the US market, which depend on US government support, has to be balanced.
However, as we know, performance is the most important characteristic for potential customers. In other words, Cochlear has to deliver a higher competitive performance to explain an upper price, which is not actually the case. On the other hand, decreasing the price would enable Cochlear to be even more competitive, and would help non-fully insurance coverage deaf people to afford the implant. However, cutting the price means also cutting spending. Those spending may take several forms within which is research and development; which department took a survival role in this field.
Investing in marketing better their implant wouldnt be so useful, due to the fact that generally patients are informed by ENT specialists on the latest technology, and worldwide ENTs awareness is between 70-80%, which will definitely increase by itself through word of mouth. Potential patients 5% awareness is not alarming, especially if we look at Cochlears market share, which is 90% in the US and 60% in Europe. These numbers show that patientsnon-awareness hasnt a big impact on sales. Concerning the idea of using the over-capacity of production to create a second cheaper model this may open new markets, like Turkey and Greece. Nevertheless, this may cause brand dilution due to the fact that Cochlear is now trying to emphasize the high performance of its product. Instead, this extra-capacity could be used for developing the children market, for which Cochlear is on the way to receive the FDA approval.
This segment should be easier to penetrate due to parents willingness to provide the best to their children, and Cochlear to take advantage of its actual advanced technology to conquer it. 5. Recommendation Personally, I would recommend Cochlear to invest in increasing the number of ENT specialists, who fit Cochlear devices in the implant centers and to not, in a short-term, touch the price. When we know that on 7,000 ENTs in the US, only 200 fitted representing 90% of the actual market, and that in Europe on 2,500 ENTs, only 40 fitted representing 60% of the market, we may definitely say that this will be a key success for future growth. Using the extra-production capacity to develop and enlarge the children segment seems more logical for me, when we may hope an easier market penetration, and at the same time skip any problem of brand dilution.
Bic vs. Gillette Questions 1. I think that the man himself is, to a large extent, the only one involved in his decision to buy a disposable razor. In some cases, his wife may play a certain role, but more in the buyer role . Due to the fact that it is a personal product, it seems logical that the user is the initiator, influencer (with sometimes his wife), decision maker, and the user , and in a less extent also the buyer, which role is often taken by his wife. Personally, I think that this scheme is more or less the same for a system razor with a more powerful role hold by the man, due to the fact that it is not anymore a one use product.
1. Here, we should make a differential between people who attach a certain importance to it, and those who do it mechanically. Certain people see in it an opportunity to show their masculine side, and therefore are really involve in the buying decision process. For those people, the behavioural aspect that characterized them is the status-seeking men . Those people are ready to pay an extra price for a product that would ensure them with more security .
Others, do it more like an ordinary action than anything else, and are looking for a simple product which will give them the sensation of having done a good deal , by purchasing a cheap product that will end more or less with the same result. 2. What can influence a man to purchase a wet-shave razor ? First of all, I think that the pecuniary problem may explain numerous of cases where a man chose a wet-shave razor rather than an automatic one. Secondly, there is also the old way aspect of the action that may play a role in his decision. Finally, there is no need to recharge it as the automatic one and, in the case of a forgetting (travel) or loss, there is less psychological retention to buy another one.
Gillette pursued the strategy of status-seeking men , emphazising on the masculinity of this action, and enabling the user to self-identified with the item. Therefore, the consumer will be ready to pay an additional amount to get a better product. At the opposite, Bic pursued a strategy of turning status products into commodities, arguing that consumers will not feel embarrassed to buy and be seen using the new, cheaper version of the product. Bics marketing strategy is simple : maximum service, minimum price. 3.
Gillette should continue to pursue its status-seeking men strategy, and at the same time emphasized on the message that disposable razors should be used only when traveling and in the licker room, at the condition that the consumer has forgotten his normal razor . As long as they are performing well, as it is the case actually, I dont see the need to change their strategy. However, this may depends on the consumersreadiness to absorb new products. If they are open to change their daily habits, which is not often the case, there could be a possible change in their marketing strategy. This last one is very risky, due to the fact that Gillette is actually the market leader due to all the importance that they have given to the shaving action, and the old fashion . 4.
I think the successes that Bic acquired in the pen and lighter market may be explain by the fact that those market dont touch directly the consumer look. Therefore, Bic had the opportunity to demonstrate that those items could be taken more as a commodity rather than a status product, which was rapidly accepted by the market. But as soon as Bic tried to do so on the consumer care product, it failed, as can show the perfume, and at a less extent the shaver markets. The human being is ready to change status products into commodities as long as they dont touch its own look directly, but all the population. That is the reason, I think, why Bic didnt succeed in the perfume market, because it devaluates directly a person regarding to his outside aspect : Oh, you smell Bic !. Bic is known as a very cheap brand, nobody wants to give himself a Bic look.
The relative shaver market failure can be explained by the fact that it touches the look of the consumer. Do you want to shave yourself with a cheap razor, and expose yourself to a higher risk of cutting your skin and of allergy ? Everyone would answer : No !. The small market that Bic get is due to the fact that it is very convenient, in the case that you have forgotten your habitual razor, to buy a disposable one to momentarily help you. Marketing and Advertising.