Which of the two target markets should Eliza Minden pick, and why?
Minden has two markets to hose from, including the professional dancers and dance students, mostly from the age of 10 to advanced students through to adulthood. Minden should pick the professional dancers segment as it has advantages compared to dance students. Minden managed to produce patented shoes from a common sense approach, by promoting their comfort, durability, and injury prevention. This target market makes their choices for pointe shoes based health, safety, and durability. From the interviews, most ballerinas agree that comfort and fit are the most important factors that affect the choice of pointe shoes they make. From the interviews, some of the ballerinas noted that the noise irritated them. A member of the New York City Ballet, Gwyneth Muller reiterated that their pointe shoes made so much noise while on performing such that they sounded like a “herd of elephants than a group of ballerinas” (Case Study). Minden’s pointe shoes were relatively quiet and this could make performance more appealing to the audience. Additionally, professional dancers were more concerned with comfortable shoes that could help them alleviate injuries for the sake of comfort, performance and longevity of career. Additionally, professional dancers donning Gaynor Minden shoes could serve as brand ambassadors to young dancers when they see top professionals wearing them.
What feature(s) of the new pointe shoe will the target market find most valuable?
The features that the target market for the new pointe shoes will find most valuable include the comfort, injury prevention, and durability. Professional dancers are the most susceptible to injuries because of the longer duration of pointe work. They are more interested in ways of preventing injuries and avoiding toe sores. From the interviews, Kate Feldman says that she no longer dance because of an injury due to falling. Most of the interviewed ballerinas mentioned that fit was important as it affected comfort and performance. With Minden’s shoes, dancers do not need to modify the shoes to make them fit. In addition, Gaynor Minden shoes were exceptionally quite on stage compared to traditional pointe shoes (Case Study). This benefit was particularly important to professionals dancers held with the highest standards in the industry who usually perform to first-class acoustics.
What price will you set for a pair of shoes, and why?
Price is the amount that customers pay for a good or service. This is the only marketing mix element that produces revenue, and as such determines profit or loss. In order to come up with a suitable price, an entrepreneur must calculate the costs, both fixed and variable used in marketing, production, and distribution of the product. Setting costs involves conducting an external environment analysis using analysis tools such as PEST framework to determine the business environment factors that affect the market and the business.
In order to identify the price for a pair of shoe, Minden must consider the various pricing methods, which include cost-based pricing, target return pricing, value based pricing, pr psychological based pricing. In this case, Minden should use cost based pricing, which require pricing a pair of shoe calculating the production cost and adding a certain profit margin. Cost pricing will require calculating the total cost for producing a pair of shoe. The variable costs incurred by Minden for each pair of shoe are $37 for labor, $27 for materials, and$4 for packaging. Fixed costs such as purchase or lease of capital equipment insurance, overhead, salaries, and loan payment were estimated at $1.6 for each pair of shoe (Case Study). The total cost for manufacturing a pair of shoe would equal $69.6. By adding a markup of 25%, the price that I would set for a pair of shoe is $87.03. From exhibit 3 in the case study, the lowest market price for a pair of shoe is 59.46 while the maximum price is $96.90. This means that Minden can target the high-end market and be profitable.