ANNY COMPUTER is a major retailer of computers and related equipment in the Yaounde, calling itself...

  

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ANNY COMPUTER is a major retailer of computers and related equipment in the Yaounde, calling itself the computer superstore. The market features much heavy advertising by different types of sellers in Marcher Central, Rond Point Express, Dell, and retailers like AC Computers and TITA Computer. However, ANNY COMPUTER probably out-advertizes them all with its regular full-page spreads in Cameroon Tribune. Because of the nature of the product most of the advertisements feature packages at a special sale price. These packages often include a variety of software, and sometimes items like printers and scanners. The featured computers are highly competitive in terms of price, and include most major manufacturers, like Compaq, Packard Bell. Advent, Hewlett Packard, Apple and Sony. The company has been expanding in terms of size and profit for several years. While many customers have been very happy with the deals that they have obtained from ANNY COMPUTER, some of them claim that the end cost has considerably surpassed their initial expectations. There are several reasons for this: 1. Some of the add-ons that they want to buy are not available with the deals on offer; sometimes the add-ons in the special offers include low-quality or obsolete items, causing one to suspect that the firm is just trying to get rid of these items by packaging them with others, since nobody would want to buy them separately. Similarly, the packages often do not include the most desirable software. Thus, even with a seemingly-complete offer, the buyer may end up having to buy several additional items to obtain the system they really want. 2. The firm tries to hard-sell its extended warranty scheme. Depending on the package purchased, this can increase cost by 5-6%. 3. The credit terms can be misleading. Often a lengthy period of interest-free credit is offered, like nine to twelve months. It is highly attractive to many buyers to buy something costing over £1,000 and not to have to pay anything at all for such a long period. These credit terms are offered through HFC Bank. The problem is that people are not notified at the end of the interest-free period, and they then become liable to pay interest on the whole purchase price from the date of purchase at a high interest rate, close to 30% annually. The result is that the unwary consumer can end up paying about twice the original purchase price over a period of four years. Source: Managerial Economics A Problem-Solving Approach Questions 1) Describe the various complementary products, both goods and services that a consumer may consider in buying a computer system. 2) Compare and contrast the situation of ANNY COMPUTER with that of a chain, as far as product mix profit maximization is concerned. supermarke The Wii is different than other video game consoles launched by Nintendo in the past due to many reasons, but the main one is the controller. The controller has revolutionized gaming. The controller uses a miniature gyroscope inside of it to detect its orientation, and a sensor bar attached to the Wii console to detect where it is in 3D space. The controller can be used much like a mouse, as things on the screen can be manipulated simply by pointing and pressing a button, but instead of moving the controller on a flat surface, a person can simply point the controller at the TV much like a TV remote. By this merit, the controller has become simple, and it gives game developers something new to toy with. Nintendo packaged a game with the system called Wii Sports, which features 5 different minigames: baseball, boxing, bowling, tennis, and golf, each having the player using the controller as if they were playing the actual game. For example, you would swing the remote as if it was a tennis racket in tennis. Launch On September 14, 2006, Nintendo released information for Japan, North and South America, Australia, Asia and Europe, including dates, prices, and projected unit distribution numbers. It was announced that the majority of the 2006 shipments would be allotted to the Americas. The media hype began immediately. The Wii was launched in the United States at $249.99 on November 19, 2006, two days after the PS3 was released in North America. It was later launched in the United Kingdom on December 8, 2006 at £179. The Wii was launched in South Korea on April 26, 2008 and in Taiwan on July 12, 2008. Sales The UK suffered a widespread shortage of console units as many high-street and online stores were unable to fulfil all pre-orders by Christmas 2006. Some UK stores still had a shortage of consoles by March of the next year. The market lead is largest in the Japanese market, where it currently leads in total sales, having outsold Playstation 3 and Xbox 360 by factors of 2:1 to 6:1 nearly every week from launch until November 2007. In 2008, the Wii was the best-selling home console in Japan with 2,908,342 units sold. In Australia, the Wii exceeded the record set by the Xbox 360 to become the fastest-selling game console in Australian history. In the North American market lifetime-to-date sales for the Wii have reached 30 million in the North American market alone since the console's launch in November 2006. Demand still outpaced supply in the United States as of June 2007. In October 2008, Nintendo announced that between October and December 2008 the Wii would have its North American supplies increased considerably from 2007's levels, while producing 2.4 million Wii units a month worldwide, Unfortunately for consumers, it took until March 2009 (and 48 million units) to make Wii available compared to those who want to walk into a retail store and pick one up. million per month in to 1.6 2007. Profit While Microsoft and Sony have experienced losses producing their consoles in the hopes of making a long-term profit on software sales, Nintendo reportedly has optimized production costs to obtain a significant profit margin with each Wii unit sold. Nintendo reported on May 7, 2009 increases in operating profits for its fiscal year (April 1, 2008 - March 31, 2009), and a rise in sales setting record earnings compared to the previous year. Price drop On September 23, 2009, Nintendo announced its first price drops for the console. In Japan, the price dropped from ¥25,000 to ¥20,000, effective October 1, 2009. In the United States, the price was reduced to $199.99, effective September 27, 2009. In Europe (excepting non-eurozone nations), the price of a Wii console dropped to €199 from €249. Nintendo sold more than three million Wii consoles in the U.S. in December 2009, setting a regional record for the month and ending 9 months of declining sales, as a result of the price cut and software releases such as New Super Mario Bros. Wii. As of the end of that month, the Wii was the best-selling home video game console produced by Nintendo with sales of over 67 million units, surpassing that of the original Nintendo Entertainment System. As of June 30, 2011, Nintendo has sold 87.57 million Wii consoles. Questions 1) Would the demand for the Wii console be relatively inelastic or relatively elastic? State why. 2) Would the supply for the Wii console be relatively inelastic or relatively elastic? State why. 3) Draw the demand and supply curves as you have described them. 4) Was the severe shortage for over two years an old marketing ploy called intentional scarcity, in which a company purposely keeps its hot product in short supply to build buzz. Or was it simply bad planning on Nintendo's part? What did this mean for households? What were the implications for Nintendo? 5) Can you suggest a reason why Nintendo dropped the price of the Wii Console in late 2009. How would you expect this to affect revenues? ANNY COMPUTER is a major retailer of computers and related equipment in the Yaounde, calling itself the computer superstore. The market features much heavy advertising by different types of sellers in Marcher Central, Rond Point Express, Dell, and retailers like AC Computers and TITA Computer. However, ANNY COMPUTER probably out-advertizes them all with its regular full-page spreads in Cameroon Tribune. Because of the nature of the product most of the advertisements feature packages at a special sale price. These packages often include a variety of software, and sometimes items like printers and scanners. The featured computers are highly competitive in terms of price, and include most major manufacturers, like Compaq, Packard Bell. Advent, Hewlett Packard, Apple and Sony. The company has been expanding in terms of size and profit for several years. While many customers have been very happy with the deals that they have obtained from ANNY COMPUTER, some of them claim that the end cost has considerably surpassed their initial expectations. There are several reasons for this: 1. Some of the add-ons that they want to buy are not available with the deals on offer; sometimes the add-ons in the special offers include low-quality or obsolete items, causing one to suspect that the firm is just trying to get rid of these items by packaging them with others, since nobody would want to buy them separately. Similarly, the packages often do not include the most desirable software. Thus, even with a seemingly-complete offer, the buyer may end up having to buy several additional items to obtain the system they really want. 2. The firm tries to hard-sell its extended warranty scheme. Depending on the package purchased, this can increase cost by 5-6%. 3. The credit terms can be misleading. Often a lengthy period of interest-free credit is offered, like nine to twelve months. It is highly attractive to many buyers to buy something costing over £1,000 and not to have to pay anything at all for such a long period. These credit terms are offered through HFC Bank. The problem is that people are not notified at the end of the interest-free period, and they then become liable to pay interest on the whole purchase price from the date of purchase at a high interest rate, close to 30% annually. The result is that the unwary consumer can end up paying about twice the original purchase price over a period of four years. Source: Managerial Economics A Problem-Solving Approach Questions 1) Describe the various complementary products, both goods and services that a consumer may consider in buying a computer system. 2) Compare and contrast the situation of ANNY COMPUTER with that of a chain, as far as product mix profit maximization is concerned. supermarke The Wii is different than other video game consoles launched by Nintendo in the past due to many reasons, but the main one is the controller. The controller has revolutionized gaming. The controller uses a miniature gyroscope inside of it to detect its orientation, and a sensor bar attached to the Wii console to detect where it is in 3D space. The controller can be used much like a mouse, as things on the screen can be manipulated simply by pointing and pressing a button, but instead of moving the controller on a flat surface, a person can simply point the controller at the TV much like a TV remote. By this merit, the controller has become simple, and it gives game developers something new to toy with. Nintendo packaged a game with the system called Wii Sports, which features 5 different minigames: baseball, boxing, bowling, tennis, and golf, each having the player using the controller as if they were playing the actual game. For example, you would swing the remote as if it was a tennis racket in tennis. Launch On September 14, 2006, Nintendo released information for Japan, North and South America, Australia, Asia and Europe, including dates, prices, and projected unit distribution numbers. It was announced that the majority of the 2006 shipments would be allotted to the Americas. The media hype began immediately. The Wii was launched in the United States at $249.99 on November 19, 2006, two days after the PS3 was released in North America. It was later launched in the United Kingdom on December 8, 2006 at £179. The Wii was launched in South Korea on April 26, 2008 and in Taiwan on July 12, 2008. Sales The UK suffered a widespread shortage of console units as many high-street and online stores were unable to fulfil all pre-orders by Christmas 2006. Some UK stores still had a shortage of consoles by March of the next year. The market lead is largest in the Japanese market, where it currently leads in total sales, having outsold Playstation 3 and Xbox 360 by factors of 2:1 to 6:1 nearly every week from launch until November 2007. In 2008, the Wii was the best-selling home console in Japan with 2,908,342 units sold. In Australia, the Wii exceeded the record set by the Xbox 360 to become the fastest-selling game console in Australian history. In the North American market lifetime-to-date sales for the Wii have reached 30 million in the North American market alone since the console's launch in November 2006. Demand still outpaced supply in the United States as of June 2007. In October 2008, Nintendo announced that between October and December 2008 the Wii would have its North American supplies increased considerably from 2007's levels, while producing 2.4 million Wii units a month worldwide, Unfortunately for consumers, it took until March 2009 (and 48 million units) to make Wii available compared to those who want to walk into a retail store and pick one up. million per month in to 1.6 2007. Profit While Microsoft and Sony have experienced losses producing their consoles in the hopes of making a long-term profit on software sales, Nintendo reportedly has optimized production costs to obtain a significant profit margin with each Wii unit sold. Nintendo reported on May 7, 2009 increases in operating profits for its fiscal year (April 1, 2008 - March 31, 2009), and a rise in sales setting record earnings compared to the previous year. Price drop On September 23, 2009, Nintendo announced its first price drops for the console. In Japan, the price dropped from ¥25,000 to ¥20,000, effective October 1, 2009. In the United States, the price was reduced to $199.99, effective September 27, 2009. In Europe (excepting non-eurozone nations), the price of a Wii console dropped to €199 from €249. Nintendo sold more than three million Wii consoles in the U.S. in December 2009, setting a regional record for the month and ending 9 months of declining sales, as a result of the price cut and software releases such as New Super Mario Bros. Wii. As of the end of that month, the Wii was the best-selling home video game console produced by Nintendo with sales of over 67 million units, surpassing that of the original Nintendo Entertainment System. As of June 30, 2011, Nintendo has sold 87.57 million Wii consoles. Questions 1) Would the demand for the Wii console be relatively inelastic or relatively elastic? State why. 2) Would the supply for the Wii console be relatively inelastic or relatively elastic? State why. 3) Draw the demand and supply curves as you have described them. 4) Was the severe shortage for over two years an old marketing ploy called intentional scarcity, in which a company purposely keeps its hot product in short supply to build buzz. Or was it simply bad planning on Nintendo's part? What did this mean for households? What were the implications for Nintendo? 5) Can you suggest a reason why Nintendo dropped the price of the Wii Console in late 2009. How would you expect this to affect revenues?

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1 The demand for the Wii console would likely be relatively inelastic This is because the Wii consol... View the full answer