December 16, 2013
Dr. Alfred Igbodipe
Will Bury owns and operates a company that converts books into digital format for listening or reading by his customers. If Will Bury wants to take his company to the highest level, then a business proposal needs to be developed to increase sales that would expand his inventory. Will Bury’s company needs to determine the profit maximizing quantity to gain the most profit while minimizing their costs for the digital books. To have future success one must increase barriers into the business and differentiate their products from what the public has already seen and what is available right now. As we are coming out of a trough business cycle and entering into a expansion market it is important to really focus on maximizing profits and gaining as much market share as possible.
Marketing Will Bury need’s to figure out a way to increase his revenue and the most common way is to increase marketing of the product. To increase sales, the company needs to figure out a way to increase the visibility of the product without spending too much. Will Bury needs to do more research on the ways other competitors are marketing their products and use that information as a tool to figure out a more cost-effective way to market the digital books. Marketing the product is the key to increasing sales of the older books and the new books. Since the sales for the newer books is larger Will Bury should focus a larger part of his marketing budget on the newer books because of the higher sales of books that people are familiar with. Because the demand seems to favor the newer books the increase in sales and demand will likely come from that side of the business. Marketing and advertising relies on researching a target market and placing ads in venues where that target market exist. Reaching a target market is usually not that easy, it will take research and strategic decisions that will have a future impact on sales.
Market The market for digital books are under higher competitive pressure then traditional retailers, and this causes lower prices in the digital markets in a traditional since. In most cases the digital and electronic market are higher for every product. In looking at the real-world cost of regular books versus digital books one will see that online or retail books are priced the same once the shipping costs are taken into account. In a traditional since the market for digital books is monopolistic competition because there are no barriers to entry because of his patent, and there is, an unlimited number of producers and consumers and all firms produce similar yet not perfectly substitutable products. Knowing this Will Bury has to make sure he is controlling the costs of digitizing books ensuring that the technology he is using is keeping his costs down. This process will affect his cost because if he can keep his cost of goods sold down his profits and revenue will increase.
Pricing and Non-pricing Strategies Mr. Bury needs to be very sensitive to prices because he is dealing in a very elastic environment and customers are very sensitive to price changes. When looking at digital books price sensitivity on the Internet could turn out to be lower for conventional retailers. Studies have shown that price sensitivity in the grocery market, comparing price sensitivity of groceries sold through online and conventional outlets, find that the online shoppers demand is less price sensitive than it is for the brick and mortar shoppers. This can be because of several factors that include consumers choose to buy online mostly when they are under time pressure, so they are less likely to experiment with new products or businesses. If that is the case, consumers usually continue buying from the same sellers rather then switching to new ones. This is something that Will Bury has to overcome in his marketing plan…