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Student's Name: College Name Semester/year Enrolment Number

Joe Schmoe analyzed the sales performance and strategies of Tablet Development Corporation's tablets, the X5, X6, and X7, from 2012 to 2015. The X5 and X6 were established in the market while the X7 was introduced in 2012. The analysis found that the X5 and X6 grew significantly from 2012 to 2013 as they were in the growth stage, but started declining in 2014 as they entered the maturity and decline stages. The X7 struggled initially but grew from 2013 to 2015 as it was still in the introductory stage. The conclusion recommends employing different strategies like reducing price and costs for mature products like the X5 and X6, while potentially increasing price for an introductory product

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52 views

Student's Name: College Name Semester/year Enrolment Number

Joe Schmoe analyzed the sales performance and strategies of Tablet Development Corporation's tablets, the X5, X6, and X7, from 2012 to 2015. The X5 and X6 were established in the market while the X7 was introduced in 2012. The analysis found that the X5 and X6 grew significantly from 2012 to 2013 as they were in the growth stage, but started declining in 2014 as they entered the maturity and decline stages. The X7 struggled initially but grew from 2013 to 2015 as it was still in the introductory stage. The conclusion recommends employing different strategies like reducing price and costs for mature products like the X5 and X6, while potentially increasing price for an introductory product

Uploaded by

Mona Vimla
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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College Name Semester/year Enrolment number

Students name
Joe Schmoe results and analysis of its strategies for Tablets X5, X6, X7

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Contents
Contents................................................................................................................ 2 Appendix................................................................................................................ 7 1.Sales Performance........................................................................................ 7 2.Performance of all products from 2011- 2015..............................................8 3.Revenue earned over the years...................................................................8 4.Profit earned over the years.........................................................................9

Introduction
Tablet Development Corporation develops three types of tablets that include Tablet X5, Tablet X6, and Tablet X7. Tablets X5 and X6 have been in the market previously, but Tablet X7 is introduced into the market in 2012. Joe Schmoe has been the Vice President of marketing in the organization and has the responsibility of developing the marketing strategiesfor the tablets. He was responsible for setting pricing and research and development cost for products from 2012 up to 2015. Joe Schmoe's strategy involved maintaining constant pricing and constant research and development allocation.

Analysis for the Year 2012

Tablet X5 is priced at $ 285, and 33% research and development cost amounting to $7, 92,000 was allocated to the product. Tablet X5 recorded sales revenue amounting to $469,563,809 while sales volume amounted to 1,647,592 units and resulted in variable costs amounting to $247,138,847. Tablet X5 sales revenue, sales volume and variable costs increased by 70% compared to 2011. Total profitability for the year was 30% compared to 16% in 2011 and total profit generated amounted to $ 139,504,962 which is 217% increase compared to the previous year. Market report indicates that installed customer base of 1,917,729 compared to 1,035,000 in 2011. Market saturation for the tablet is recorded at 27% in 2012 as compared to 15% in 2011,hence the product is in the growth stage. Tablet X5 recorded 67% increase in first time customers and 96% in repeat sales. Tablet X5 performed well in 2012 reflected by increases sales volume, revenue and total profit generated and its performance compares with favourably with other tablets. Tablet X6 is priced at $430, and 34% research and development cost was allocated to the product. Customers pay more for X6 as compared to tablet X5 & X7. In Tablet sales volume, sales revenue and variable costs increased by 129% whereby sales volume amounted to 1,288,999, sales revenue at $ 554,269,513 and variable cost $354,474,689. Profit generated from Tablet X6 amounted to $ 154,134,824 which shows an increase of310% while profitability increased from 16% to 28%. Tablet X6 registered 149% increase in repeat sales and 127% increase in first time customers. X6 sales are in the growth phase of the product life cycle. The majority of possible X6 customers has not yet purchased the product. Tablet X7 is priced at $ 190 and was allocated 33% research and development cost which amounted to $ 7,920,000. It is introduced in 2012 only. Financial results of X7 showed loss in2012 which amounted to $ -23,065,952. Tablet X7 had low market saturation amounting to 2%. It is in the introductory phase of product life cycle.

Analysis for the Year 2013


Tablet X5 recorded sales volume amounting to 2,145,622, sales revenue of $ 611,502,211 and variable cost of $ 321,843,269,thus resulting in an increase of 30% over year 2012. Total cost for the product increased by 23%. Total profit recorded for the year was $ 206,738,942showing an increase of 48%. Total profitability was recorded at 34% compared to 30%. The market had an installed customer base of 3,395,970 which increased by 77% while market saturation is registered at 48%;thus the product is in the maturity stage. Tablet X6 had shownan increase in sales volume, sales revenue, and variable cost by66%. Tablet X6 recorded sales volume of 2,164,931, sales revenue $ 918,020,206 and variable cost of $ 587,105,945. Profit generated amounted to $ 285,254,261 which shows85% increase. Market saturation reached 34% compared to 16% in 2012. Tablet X6 recorded 62% increase in first time customers while repeat sales increased by 106%. Tablet X7 maintained pricing at $ 190 and 33% allocation in research and development. It recorded 43% increase in sales volume, sales revenue and variable cost. Total loss has reduced as compared to 2012, it amounted to $ -13,397,741. X7 performance is below that of the competition. The tablet had market saturation of 3%,which indicatedthat the product was in the introductory stage. First time customers increased by 43% while repeat sales increased by 44%. There are many potential X7 customers remaining in the market. Most of customers for X7 handheld are new customers.

Analysis for the Year 2014


Tablet X5 declined by 14% in 2014 as compared to 2013 in terms of sales volume, sales revenue and variable costs. Sales volume amounted to 1,853,177, sales revenue amounted to

$ 528,155,442 while variable cost was recorded at $ 277,976,548. Total costs for the tablet decreased by 11%. Tablet X5 total profit decreased by 19% to $ 167,258,894 and profitability decreased by6%. The market had installed base of 5,243,890 and remaining customers amounted to 1,791,110. Market saturation for the product was 75% thus the product is in the decline stage. First time customers decreased by 24% while repeat sales increased by 54%. X5 handheld has reached the shakeout phase of the product life cycle. New sales of X5 are declining. Tablet X6 recorded sales volume of 2,364,061, sales revenue of $ 1,016,546,240 while variable costs amounted to $ 650,116,782. Sales revenue and variable costs increased by 11%. Profit recorded for the period amounted to $ 320,769,458 which shows 12% increase and profitability increased from 31% to 32%. Market saturation reached 63% thus the product is in the maturity stage, installed base reached 4,133,364 and remaining customers are2,416,636. First time customers increased by 2% while repeat sales increased by 82%. In tablet X7 sales volume, sales revenue and variable costs amounted to 338,448, $64,305,057 and $18,614,622 respectively thus resulting in 41% increase. Total profit amounted to $ 270,435 compared to loss of $ 13,397,741 in 2013. First time customers increased by 42% and repeat sales increased by 44%. Market saturation reached 4% thus the tablet is in the introduction stage.

Analysis for the Year 2015


Tablet X5 recorded 48% decrease in sales revenue, sales volume and variable costs. Sales units for the period amounted to 963,776, revenue at $ 274,676,048 and variable costs at $144,566,341. Tablet X5 recorded total profit of $ 47,189,707 and profitability decreased from 32% to 17%. Market saturation reached maximum at 94% evidenced by the fact that the

tablet did not record new sales, but repeat sales increased by 26%. Sales for X5 had reached maturity and mostly replacements are being sold. Tablet X6 also recorded declined in performance where the number of units sold, revenue received and variable costs incurred in the period decreased by 53%. Total costs incurred in selling the tablet reduced by 49%. Total profitability amounted to $ 127,652,006 which represents 60% less as compared to 2014 profit while profitability decreased from 32% to 27%. Tablet X6 had reached 93% market saturation, it did not register any first time customers but repeat sales increased by 45%. Tablet X7 maintained good performance whereby profit received amounted to $ 19,356,592 which depicts 67% increase and profitability increased from 0% in 2014 to 21% in 2015. Number of units sold, sales revenue generated and variable costs increased by 39%. The tablet is still in the introductory phase as reflected by market saturation of 5% and has an installed base of 972,506. First time customers increased by 38% while repeat sales increased by 44%.

Conclusion
Different strategies should have been employed at different stages of the product life cycle. For Tablet X5 and X6 the price should be reduced at the maturity stage and also costs should have been reduced in order to maintain margin contribution, attract customers and maintain sales. Tablet X7 price can be increased since the product is in the introduction stage thus price would not significantly affect the sales of the product.

Appendix
1. Sales Performance

2. Performance of all

products from 2011- 2015

3. Revenue earned over the years

4. Profit earned over the years

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