Typewriter

Typewriter

The typewriter was faced out of the market mainly due to the inception of the personal computer. The computer is considered ideal in place of a typewriter mainly because it is easy to edit information, store and reproduce. Other functions include the ability to connect to the internet and send information in the form of e-mail. In order to market the mechanical typewriter back into the market, these factors will have to be considered or better yet the implementations of a different concept that does not necessarily compete with the typewriter but sets it on it own level. The marketing of this product will be primarily based on its relic value. The product will be marketed as a relic although it will include a scanner that converts the typed script into digital that can be later manipulated as word document by saving into a flash disk and loading it into a computer.

Cost/Production

The reproduction cost of the typewriter is relatively low because it is different from the inception of a new technology. The only additional cost involves the integration of the scanner that converts the script into digital format. With most technologies, the initial inception into the market is often very costly leading to the high prices depicted by the first products to be launched in comparison to the subsequent products. However, with the typewriter, the initial products will be relatively low in comparison to other technologies because the technology is already available (Ainslie, 1992).

The fixed costs incurred in the production of the commodity include the wages and salaries paid out to the workers, rent for the plant property in addition to the legal requirements. Other costs to be put under consideration are the regulatory costs. These costs will be spread across the cycle from the producer, marketers with minimal effect to the consumer. Taxation costs are considerably reliable considering the political stability and enforcing policies of the land. Cost control procedures include the involvement of “captive supplier”. The variable costs incurred by the company mainly include labor expenditures and fuel. Additional variable costs include the material for the equipment’s assembly and power.

Market Structure

The management is to consider a perfect competition market structure for comparison purposes. In this case, this structure is mainly used as a benchmark against other market structures. It is assumed that all the competitors deal in similar products, have the freedom of entry and exit and have a relatively small market share. Because most of the production companies dealing in the product are phased out, the initial market structure is characterized by a monopoly whereby the company will not be facing any competition. The scanner enables the company to enjoy a monopolistic competitive marker in that since there are no other companies dealing in such a product, the products are differentiated from one another as good substitutes.

Three product characteristics includes the relic value of the products, the low prices, the ability to convert into digital format and the ability to operate under the lack of electricity. The market structure is rife for relic typewriters with most people showing interest in historical typewriters mainly showcased in museums. The introduction of such relics into the market is bound to guarantee increased sales. The low price characteristic of the commodity and the ability to operate manually without using electricity is favored by the market that is characterized by the credit crunch, power interruptions and fuel supply inconsistency.

Revenue Stream

The first appropriate pricing strategy for the product is the environmental strategy. This involves basing the price of the commodity on the competitive and legal environmental where the company operates. The pricing of the products is deliberated after consideration of the implication of its pricing on the pricing decisions of other companies dealing in similar or related commodities. Prices are set relatively low while at the same time avoiding the risk of a price that proves detrimental to wither side. The legal environment is highly analyzed so that the price is in alignment with legal aspects such as price controls. The second appropriate pricing strategy for the product is based on estimating the demand curve. The relationship between the price and quantity demanded enables the management to appreciate the effect of pricing on sales through estimating the demand curve of the typewriters (Camerer, 1995).

Strategic Considerations

One of the appropriate economic game theory strategies addressing market structure and product is the Prisoners’ dilemma. This game theory is preferred because of the direct competitors in the market. This strategy can be executed when taking into account market considerations. When the company is deliberating on the amount that can be spent in marketing, the instance the company plus its competitor fails to spend in marketing, both the companies will split the sales and in turn reap lump sum profits. In the event that one company markets its products while the other fails, the marketing company will make maximum sales and increase the profits. On the other hand, if both engage in marketing, the same sales are realized as the initial situation although the profits are minimized because of increased in cost. The best approach to this dilemma is therefore to market the product regardless of the decision made by the competitor. The other possible strategy is “tit for tat”. This is a game-theory mechanism subject to a payoff matrix similar to that of a prisoner’s dilemma. In this process, the company engages in cooperation and later copies the competitor’s previous action (Dixit, Skeath, and Reiley, 2009).

Creativity

In order to revive this once market dominant product, creativity is necessary in making the product relevant in the current market. The first appropriate use for this commodity is as an artifact or relic. This is highly appropriate with the high end market. Older models can be remodeled and resold to artifact and relic enthusiasts. The second appropriate use for this product is conversion of the text into digital format. This is through the incorporation of a scanner comes in handy by giving the consumer the feeling of experiencing the nineteenth century in the twenty-first century. The scanner enables the user to convert the typed script into digital format and thus the document can also be used in tandem to other modern technologies such as saving it on flash disk or sending it via electronic mail.

 

References

Ainslie, G. (1992). Picoeconomics. Cambridge: Cambridge University Press.

Camerer, C. (1995). Individual Decision Making. In J. Kagel and A. Roth, eds., Handbook of Experimental Economics, 587–703. Princeton: Princeton University Press.

Dixit, A., Skeath, S., and Reiley, D. (2009). Games of Strategy, Third Edition. New York: W. W. Norton and Company.

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