Pricing And Marketing Plan


Cumberland metal industries are renown for making metal products. However, in recent company has developed a new product which provide health safety and long durability as well as assist contractors in driving piles faster. The main purpose behind developing cushion pads is that it assist in preventing from shock of hammer from damaging hammer or pile. Despite of the significance of these pads to the procedure of pile driving, most of companies still give great importance and attention while executing the work of pile driving. Present research report focuses on providing selling price of these cushion pads so that company can attain desired profit margin. Along with it, researcher aims at evaluating the economic value for customers and the appropriate customer segment to target and promote the Cushion metal pads. Lastly, in regards to launch product, report consist of marketing plan to assist Cumberland Metal Industries.

Pricing Strategy

In general terms pricing is one of the most important decision that management has to take in order to create demand and space within target market. Operating in a metal industry, Cumberland is one the leading firm in providing metal parts for pile driving (O'Donnell, 2014). However, company should set objective of the new business with clear aim and objective of creating monopoly and maximizing profits. In context to creating monopoly, top level management has to focus on getting patent of the product in order to prevent from being copied and reproduced. Rationale behind this statement is that, until Cumberland Metal Industries does not patent cushion metal pads, CMI should not sell because it will increase the level of competition as to produce these pads there is not such high level technology is used (Zhang, Wang and Ren, 2014).

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In regards to price the product, top level management should undertake cost to price method in order to deliver value to its customers. Selling price of (11½ inches cushion metal pads) computation as follows:

Variable cost @ 250units = $11110

Fixed cost (with existing equipment) = $25000 / 250units

Metal pads, CMI management should use existing equipment. Rationale behind this recommendation is that, using permanent tool equipment will increase the fixed of product by $50000 due to which selling price increase and profit margin decreased. Whereas using existing approach of producing the 250 units of cushion metal pads will maintain the fixed cost of $25000 as well as increases the probability of higher profit margin. Therefore, it can be stated that, management of Cumberland Metal Industries should use traditional method of producing these pads and enhance the value for customers.

Economic Value for Customer

In general terms, economic value to customers can be defined as monetized cost and benefits as well as graduated in economic terms (McKean, 2010). According to the present given scenario, cushion pads provides different values to different customers. It is the responsibility of buyer to make optimum utilisation of it. Below presented table shows the importance of cushion metal pads for different customers segments.

Projected attitude Importance Who?
Neutral High Pile hammer Manufactures
Positive High Architectural/ Consulting engineers
Positive Medium/low Soil consultants
Negative High Pile hammer distributing or renting companies
Positive High Engineering/construction contractors
Positive Medium/low Independent pile driving contractors
Positive Medium (To CMI) Workers

From the above table of significances it can be stated that, Cushion metal pads very from customer segments. It is because each of the customers make it use in different manner which indeed changes the importance for the customers (Feng, Li and Zhang, 2014). Furthermore, CMI pads provides several efficiency advantages over other pads. However, these benefits and advantages lead contractors to perform their tasks and operations at low cost to influence the purchasing decision and market penetration.

Economic value to the customer (EVC)

In general terms, this method illustrates the maximum amount that a customer is willing to pay for the product. Further, assuming that buyer is totally aware about the benefits and drawbacks of the product in comparison to the competitors offering. According to the present given scenario, Cumberland Metal Industry offer the 11½ inches metal cushion in the target market to enhance the efficiency of pile hammer. In order to evaluate the EVC researcher has to use the below illustrated formula:

EVC = Reference Value + Differentiation Value.

However, reference value refers to the price of closest substitute product used in the same target market. On the other hand, differentiation value refers to the product's attribute difference between own offering and the closes substitute. In the present case, Cumberland Metal Industry, Cushion metal pads closest substitute is Aabestos pads.

Comparative performance

According to the Colerick test, when two pads were compared various results and outcomes were generated. For instance, CMI get the job required 300 55 foot plies driven 50 feet under the ground. Contractor used Asbestos pads first and for which 18 pads were placed at the start for the job until they lost their resiliency. In regards to this, few more pads were added until set of 24 completed. However, these much pads spent all of them were removed and repeated the cycle.

On the other hand, when CMI pads were used initially four were installed until 46 plies were driven. Thereafter, 1 more pad was added and driven until 184 pile were completed. Furthermore, 1 more inserted in the helmet until job was completed.

Identify the price of the closest competitive product to determine reference value

Therefore, according to the above test it can be said that, Asbestos pads took 106.7 hours to complete the tasks. In regards to this, number of asbestos pads required by contractor to complete the job are 480. Therefore, the total cost of asbestos pads was $1008 or $2.10 per pad. On this basis reference price of the competitor is assumed $1400 of 11½ metal cushion pads.

Identify all factors that differentiate your product from the competitive product

According to the given case study, both products can be differentiated on the level of their efficiency in completing the given task or job. Form the table provided it can be evaluated that, CMI pads in comparison to asbestos pads are more feasible as they are performing well enough to accomplish pile hammer project in 75.07 hours whereas, asbestos pads are consuming more than 106 hours to accomplish the same activity. Along with this, Asbestos on per set of pads are piling on 15 feet where as CMI around 300. in addition to number of pads in a set is 24 for asbestos and 6 for CMI. For the present work, number of set changes required by contractor in case of asbestos around 20 and using CMI only one. Contractor needed 20 minutes to change per set of asbestos and 4 minutes for CMI pads. As per this difference it can be stated that, CMI pads are more feasible than asbestos pads while conducting the given task or operations.

Determine the differentiation value

As per the Colerick Test, for the same job, CMI pads took 75.07 hours to complete. In difference to asbestos pads CMI pads were able to save $8520. the rationale behind this savings are decrease in the amount of time spent on the equipment rental as well as decrease in labour and overhead cost of pile driving. Using the permanent tool as described above price of cushion pads is $574.87 (Table 3: Price using permanent tool equipment).

Total number of hours required by both pads to complete the total job
Asbestos pads: 106.7 hours
CMI pads: 75.07 Hours
Therefore, difference between time taken by both the pads is:
106.7 – 75.07
31.63 Hours
Therefore, on the basis of hour saved, contractor was able to save $8520 with the help of CMI pads.
EVC = Reference value + Differentiation value
EVC = $1400 + $574.87
EVC = $1974.87

Therefore, with the help of perceived-value of time saved, selling price of CMI cushion metal pads can priced as high as $1900.

Marketing strategy

First of all, top level management of CMI should focus on getting patent of their new product in order to reduce the chances of entry of competitors (Smith, 2011). Along with it, corporate objective of Cumberland Metal Industries to create monopoly within target market can be achieved.


There are different channel members which could help firm in distributing its product effectively and efficiently. In regards to this, management of CMI has to develop a distribution channel. Firstly, Direct channels such as contractors who own pile hammer possesses the highest quantity and demand almost 50% of estimated market share. The main benefit of having direct channel is that, it assist senior authority of CMI to have more control on education and monitoring of its clients. Secondly, After this, management should focus on selling its products to wholesalers and hardware stores in order to reach or cover maximum small contractors within target market (Lilien, Rangaswamy and Bruyn, 2013). However, there is not such need for senior managers to concern about the product (Cushion metal pads) on rental basis because increasing demand of customers will force companies to use CMI pads.

Want to Join the Circles of



Operating in such a competitive market it is important for senior management of CMI to establish a network of influencers or increase public relation. In order to do so, marketing manager has to make effective moves such as establishing networks in a new industry as well as undertake key influencers for endorsing its products (Badiru, 2013). There are several purchase influences such as:

  • Pile hammer manufacture: Top level management of CMI does not think that these manufacturers are going to purchase their Cushion metal pads at large level.
  • Architectural/ consulting engineers: According to the CMI management these people are the most significant purchase influencer. It is because these people are specified with their hammer and its pads which does not consist them in the category of buyers.
  • Soil consultants: These are another form of Architectural/ consulting engineers but they are consulted only in the extraordinary situations.
  • Independent pile driving contractors: These are termed as front-line buying influencers. However, their main objective is to make money (Walker, 2006).

Promotional and Advertising programmes

It is the responsibility of marketing manager to frame promotional and marketing programmes with the aim of making customers perceives value of new cushion metal pads. Furthermore, in the advertisement, management of CMI has to ensure that they are appropriately educating their target consumer base about the benefits of products in terms of health benefits (no osbestos) and safety (no heating concern). Along with this, Cumberland Metal industries can make use of professional journals in order to create brand image (Feng, Li and Zhang, 2014). Furthermore, using influencer face may help the course of the firm as they can easily reach to large number of audience as well as attract them to purchase the product and generate higher revenues. Traditional marketing methods would play important role for CMI in regards to market and promote its Cushion Metal Pads.


In conclusion to the above study it can be stated that, as per the traits and characteristics that cushion metal pads have they will definitely become market leader in near future. Furthermore, getting patent will help the entire course of action for the firm and ensure future potential profitability growth. Researcher in regards to compute selling price of Pads used cost to price method and recommended best possible selling price of the product to enhance profit margin. Lastly, report ends with highlighting different channels, influencers and marketing promotional tactics to launch product and attain sustainability.


  • Feng, J., Li, X. and Zhang, M. X., 2014. Agile Pricing: How Online Product Reviews Influence Firm Pricing Strategies. Routledge.
  • Lilien, L. G., Rangaswamy, A. and Bruyn, D. A., 2013. Principles of Marketing Engineering, 2nd Edition. DecisionPro.
  • McKean, J., 2010. Managing Customers Through Economic Cycles. John Wiley & Sons.
  • O'Donnell, A., 2014. The contribution of networking to small firm marketing. Journal of Small Business Management. 52(1). pp. 164-187.
  • Smith, T., 2011. Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures. Cengage Learning.
  • Walker, 2006. Marketing strategy. Tata McGraw-Hill Education.
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