ISB Class of 2014 aspirants.

Jobs & Careers
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@saicharantej said:
Hi Puys..Let me share a case I came across recently..Would love to hear your responses regarding how to proceed with the case like what questions does first come to your mind, what information would you ask the interviewer and generally how do you go about it:Case : Our client has developed a "Coat" which is self-adaptable. You wear it in summer, it cools your body; In rainy season it protects you from rain and in winter, it keeps your body warm. It has selected India as the country where it first launches the product. I want you to tell me how you would price the coat.
Well, there are a number of ways of arriving at the price point. If I had to give a rough estimate, I would simply benchmark available substitute or complementary product type, which in this case is "4 seasons motorcycle jacket". From thereon, I will get a rough estimate to work downwards to derive my profits. Say Industry/Market Bench-marked Cost to Customer (including duties, applicable taxes etc) is INR 100, it is what it will take a customer to import something with similar features/functionality.

Next step would be to work downwards, by subtracting out localized manufacturing, distribution, marketing and miscellaneous cost to derive operating margins. Say INR 10 in this case. Hence, localized manufacturing cost should be around INR 90(Let me check again :p)

Once I get operating margins, I'll try to see if supply-demand picture makes sense* in order for me to justify my short term and long term capital and operating profitability targets.

Case 1: If it makes sense, I'll go ahead with the required investments. In this case, I can strategically position my product anywhere between INR 90-INR 100.

Case 2: If it doesn't make sense, I'll iterate, keeping practicality element in mind, to reduce costs until profitability(both long and short term) reaches upto a desired level.

*If supply-demand picture make sense :: 10X > Y
Forecast Annual Demand = X
Operating Margin = INR 10 (in our case)
My Annual Profit Targets = Y

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@icedeepeyes said:
any re-applicants in here????
Yes. :)
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@kumarPritam said:
Awesome...I am glad to see how each of us approached the problem differently. All different approaches brought something important, new and different perspective on pricing the magic coat.Now, if we put all our thoughts and approaches together, we could come up with a really good estimate on how would we price the coat and may be what exactly should be the price of this magic coat.
My pick, USD$199.
http://www.revzilla.com/4-season-motorcycle-jackets
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@whizZdumb Are we guesstimating ? :)
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@whizZdumb My bad...It seems, you are estimating based on your earlier post...

I would like to bring in a different perspective:
1. Do we sell products because we want to sell products and make profits?
2. Or, do we sell products because there are people who want to buy such products and so we manufacture those products that people want to buy, sell them and make profit?

I would go with point 2 and so, I would start with keeping customer at the center and start with finding out the people's demand of coat, segments of the customer, how much can the customer spend on a coat, other needs of the customer, do people want such coats-I think, yes because of weather in India. You have all seasons, etc.

This will give me a rough idea of market potential and price segments.

And then, I will take other factors into consideration such as Manufacturing, distribution, marketing, advertising and other such expenses to finally come up with a price tag for the coat to achieve an expected profit margin. After which, I will innovate manufacturing, distribution, marketing and advertising to save money at each steps of selling the coat to increase the profit margin further.
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Great approaches on Coat pricing. All points are very valid.

My 2 cents - as most of the approaches were around determining the cost of manufacturing, overhead, taxes, marketing cost and demand, there is one more factor I would add- - The brand value. If it's a new company launching itself with this product, then there is nothing to add but if the coat is launched by someone like North Face, Patagonia etc. I would add 30% for brand value and then pull down the price by 20% as promotional offer to hit the market (based on market survey and if I already have competition)

Also, the profit margin calculation depends on company's strategy on capturing the market - does the company want to tag itself as premium brand by focusing on a particular market segment in which case margin needs to be high or does it want to reach common man where the margin needs to be low and profits are realized by number of coats sold. (Similar to Apple IPad vs. Samsung Galaxy)

*Cannot come up with a number as all the costs mentioned earlier by everyone is still unknown.

Btw - good post. After a long I was reading something more interesting that diverted me from the anxiety of not receiving an IV call yet.

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@kumarPritam I think both the thoughts-'having a brainstorming session' and 'maintaining the core purpose of this thread of helping new and re-applicants' hold their relevance but I would rather suggest that we can have a brainstorming session, if not here lets choose some other forum and keep updated links posted here so that people can join in". Brainstorming will not only push us to come up with new ideas but also prepare us for whatsoever B-School we get into so lets not dump this idea.
Cheers
ATB

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@swetharrao Hello Swetha, we are conducting some mock interview sessions in Chennai. Please tell us if you are willing to Join in. The more the people, The more beneficial session can be.

We already had one session conducted and it was really helpful.


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@kumarPritam said:
@whizZdumb My bad...It seems, you are estimating based on your earlier post...I would like to bring in a different perspective:1. Do we sell products because we want to sell products and make profits?2. Or, do we sell products because there are people who want to buy such products and so we manufacture those products that people want to buy, sell them and make profit?I would go with point 2 and so, I would start with keeping customer at the center and start with finding out the people's demand of coat, segments of the customer, how much can the customer spend on a coat, other needs of the customer, do people want such coats-I think, yes because of weather in India. You have all seasons, etc.This will give me a rough idea of market potential and price segments.And then, I will take other factors into consideration such as Manufacturing, distribution, marketing, advertising and other such expenses to finally come up with a price tag for the coat to achieve an expected profit margin. After which, I will innovate manufacturing, distribution, marketing and advertising to save money at each steps of selling the coat to increase the profit margin further.
mHmm..You do realize you can do what you've stated in parallel and not sequentially.

1. Market Demand Simulation - Keep customer at the center
2. Cost-Benefit Simulation - Keep yourself at the center

You can deploy 2 different teams for this purpose. We have a BuzzWord for it, you might recall concurrent-Engineering.

And as far as your question goes regarding, why do we sell any product?

well, my take is that, ultimate purpose of any business is to make profit and create value. (I am an arduous capitalist). Customer Satisfaction, etc etc etc comes secondary. For any new thing that comes in market, you have to have an artificial demand for it; in this case as the product is novel for indian market, artificial demand would be more prominent.
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@whizZdumb Buddy did u get a call yet???
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are hopes lost for people from Hyd (Mum) ?

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Any calls for Kol???

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Anybody received any invites for Kolkata location? Will they not invite anyone from Kol? 12-13 Jan doesn't seem to be a possible date now. If anyone received invite for Kol please post. We are losing hope 😞

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@avijitchak Either kol calls havnt rolled out yet or people who are gttin calls are nt active here...

I hope calls havnt yet rolled out ... :(

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@avijitchak can u share ur profile .....
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@Navneet1384 Very hard to believe no call getters here 😞 Or else they are pushing the date even farther.. God knows whats happening... :-/
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@avijitchak Hey can you share ur profile???
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Guess no calls for Kol as yet!!!!!! Finger's crossed? Will calling up the admissions office help in any way?

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@anan85 U can give it a try....
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@whizZdumb said:
mHmm..You do realize you can do what you've stated in parallel and not sequentially. 1. Market Demand Simulation - Keep customer at the center2. Cost-Benefit Simulation - Keep yourself at the centerYou can deploy 2 different teams for this purpose. We have a BuzzWord for it, you might recall concurrent-Engineering. And as far as your question goes regarding, why do we sell any product?well, my take is that, ultimate purpose of any business is to make profit and create value. (I am an arduous capitalist). Customer Satisfaction, etc etc etc comes secondary. For any new thing that comes in market, you have to have an artificial demand for it; in this case as the product is novel for indian market, artificial demand would be more prominent.
Excellent points!

Another suggestion is to target niche segments (travellers, consultants & people on-the-go) to entice customers who wish to travel light but be prepared for all kinds of weather situations. Would also allow the company to charge a price premium from at least such people. Meets both the criteria you highlighted. All it would need is targeted marketing.