Graves Enterprises is a maker of consumer and commercial grade floor care products. The new vice president for Graves Enterprises is responsible for doubling sales in both the consumer and commercial markets within the next year. The new findings of an extensive research suggested that the target market is homeowners, females 29-59, with a household income of $75-$150K. Consumers and businesses use defined processes for making purchasing decisions. They are two different markets with different processes for making purchasing decisions. “Within the business world, the decision-making process—unlike that of the consumer—is marked by the inclusion of many people” (Weekly Lecture, ...view middle of the document...
An intervening factor in the consumer’s decision to purchase the eco-friendly product is the unanticipated situational factor. Pricing the product at 1.5X the price could be perceived as a financial risk. Consumers will not purchase the product if it is deemed too expensive. In the information search, the consumer will probably look at the fact that the product is safe, effective, and eco-friendly but pricey and in evaluating the alternatives will find a competitive product that has the same features but less pricey.
What additional consumer recommendations would you make? Conducting further research on how important an eco-friendly product is to the targeted market would be beneficial. “It’s estimated that 80% of new products introduced each year fail—often, this is due to a lack of a full understanding of what consumers really want.. and for what they’re willing to pay” (Weekly Lecture, 2009, p.3). For that reason, Graves’ targeted market may or may not see the value in purchasing a 1.5X floor care product when they can get the same product at a cheaper price.
Knowing what you do about business purchasing and decision making processes within a business organization, as shared in our Kotler text, what are your thoughts about the Commercial Products Proposal? Will it work? Why or why not? Graves Enterprises conducted extensive research and determined that their current market leadership positions in their current business market are safe. The commercial market base is much smaller but has great purchasing power; therefore, Graves must make sure that the product is customized for the market of schools, retail and office buildings.
The market is secure with the current price; however, increasing the price two times the current price could disrupt the company’s security and in the end may not work. There is an added...