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Forner Company

Decent Essays

De Castro, Allan Paul B.
11196734
ManAcc
Forner Carpet Company The case of Forner Carpet Company was about determining break-even points. This case requires to determine the appropriate price for a product in the market where the company is not a price leader. Forner Carpet Company, the market leader in high-grade carpet materials, plans to expand/diversify its production, and replace its equipment, hence, a need for fresh capital. In order to support this endeavour, Forner imposed a price increase on its L-42 product to boost income. However, market response has been unsatisfactory, with the competitors acquiring some of Forner’s share. That is where the problem arises. What pricing strategy should Forner Carpet Company …show more content…

But consequently, as a discount value line, the Challenger program does not align strategically with BBC’s reputation of the best cost provider strategy. But the cannibalization of the unit pretty much answers the problem. BBC would produce low cost units but it would be under the challenger brand so there would be no issue in terms of retaining the high-class quality standard of BBC. It was recommended that BBC pursue the agreement with Hi-Valu. The deal was some sort of “A Good Deal on a Bad Deal”. It would be much better if BBC could re-negotiate an even shorter deal with Hi-Valu for a more favorable credit terms. This was a case of special order basis. Suppliers could consider entering into special order basis for retailers provided that it would not eat into their current market or would not after their market share in the industry. It is advantageous as long as it is still profitable even if retailers would negotiate the least among of price for the products. The retailers would carry a different label or perhaps a different packaging so as not to confuse consumers with regards with the prices of the products. In that way, the brand is still protected but they still generate incremental incomes. Another examples are the generic brands of products, it’s just a matter of comparing the quality of generic as against the branded. I give the group a grade of 4.0 for a very concise and direct approach on the

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