Glo-Bus Games
Product strategy: Differentiation
Differentiation is an important part of Glo-Bus Games strategy regarding the marketing of its cameras. The product strategy is currently divided into two groups: entry level cameras for new users and cameras with multiple features for more experienced users. The entry-level cameras are at a lower price point because they offer fewer product capabilities and less sophisticated designs. Not only is the technology less complex, thus supporting a lower price point, but it is less likely to intimidate new users with more accessible design features.
However, the camera brand is not solely directed at new users. The overall product strategy is to entice people to use the brand when they are just beginning to explore photography as a hobby and then gradually move on to the more expensive and complex designs. For more advanced users, the product offers more features and the target user is more willing to pay the higher price point (“Glo-Bus,” 2009).
Still, at every level, the camera must be of high quality, otherwise the new users will not buy this brand of camera later on in their personal life trajectory. Three of the core components: the image resolution module, lens, and flash memory card are of the same level of quality for all camera, regardless of the price point. Quality and different designs of other components are the reason for varying prices.
It should also be noted that within these different differentiated categories there are variations in quality as well. Overall, even the entry level quality must remain relatively high but not insupportably high and higher level products must likewise still be at a reasonable price point. (A three rather than four-star level was selected for both segments).
Compensation and labor
Compensation price of labor is an integral part of pricing. On one hand, if labor is priced too low, the quality of the product may suffer. Retention levels of employees will also be compromised, resulting in expenses for retraining. There are also expenses such as warranty claims if there is insufficient training and thus higher rates of errors of employees. The costs of hiring new employees must be balanced against the costs that are incurred for new, permanent employees such as benefits and salaries when there is less of a need for full capacity employment. Outsourcing is one strategy to pursue to enable the company to have flexibility in expanding its staff and keeping costs low. This strategy was selected although there is an opportunity cost in terms of company morale and also the level of quality control that can be exercised over the product.
The investment for quarterly PAT training and productivity improvement was kept to a level of 1000 dollars. Incentive bonuses were offered to workers to encourage them to keep labor quality at a high level of a dollar per unit to reduce the risk of warranty claims against the product due to a lackadaisical attitude amongst employees. There is also a quarterly bonus of 50 dollar for perfect attendance. Fringe benefits remain at 1000 dollar per PAT member which was thought to be enough to allow for retention of current employees but not to be an excessive expense to the company over time for its permanent labor force.
References
Product design decisions. (2009). Glo-Bus.
