1 ) Before presenting its inkjet pressmans. did H-P hold to gauge the demand curve for them? Why or why non?


In 1984 HP came up with first Inkjet Printer. which was rather far from the perfect to be a complete knock-out. HP was non merely the discoverer of the Inkjet pressman it was every bit good the maker of the low cost inkjet pressmans. Before HP has launched its Inkjet pressmans there were no market existed for it as dot-matrix pressmans were the market leaders and consumers hardly had any thought of Inkjet pressmans. There were fundamentally existed no manner to find how consumers are traveling to respond to these new Inkjet pressmans. But at the same clip the new pressmans have many advantages over the bing Dot-matrix pressmans like advanced engineering. low monetary value etc. HP by their market analysis. consumer studies. research became rather confident over the success of its new Inkjet pressmans which were certainly traveling to replace old leader i. e. Dot-matrix pressmans.

Despite of holding economic systems of graduated table HP could hold chosen Direct Methods of Demand Estimation. like ;

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oConsumer Interviews. by taking a representative sample of consumers briefing them about the new merchandise and taking their sentiment & A ; positions over it. oMarket surveies can be the 2nd thought for Demand Estimation. which was chosen by HP and it has shown serious defects of point matrix pressmans like hapless print quality and colour. at the same clip it has besides shown their selling schemes etc. oExperiments performed in research lab or field without traveling to the existent market could hold besides been used for gauging the demand of Inkjet pressmans.

Above mentioned techniques would give reasonably positive consequences and given HP more assurance to establish its new merchandise to the mass market.

2 ) When analyzing Epson before traveling after the Nipponese dominated dot-matrix market. did H-P attempt to find which factors would hold an of import influence on the demand curve for its merchandise? If so. what factors seemed to be peculiarly of import.


In the twelvemonth 1984 HP has foremost invented its Thermal Inkjet Printer but it was non of that quality to run into consumers’ outlook. But HP continued to better and bring forth its Low – cost Inkjet Printers. It has besides introduced a series of expensive optical maser pressmans by utilizing “learn from Japanese” policy it continued to construct household of merchandise. In 1988 HP introduced its first Deskjet. the apparent paper pressman but it was non run intoing expected sale marks. In 1989 HP started its research. studies etc. to look into the factors which would hold importance influence on demand of its merchandise. though it was non possible to presume a demand curve. Following findings gave HP more chances to do its merchandise a smasher and leader ;

?The market leader Dot-Matrix pressman had serious defects like hapless print quality and colour. ?Epson – the market leader in Dot – matrix pressman. its sellers intended to customer’s attending and publicize it at the same clip for this they got shops to maintain their pressmans at most outstanding musca volitanss. ?Epson used tactical arms like monetary value cut to fend off challenges and it has an influence on market demand by cut downing monetary values as required by concern scheme. ?Consumers liked Epson pressmans for their dependability.

?Epson pressmans were easy to fabricate and they got immense milage out of the same merchandise by making a wide line dwelling of fluctuations of the same basic pressman.
After larning the current market. engineering and consumer behaviour. HP responded to these in following mode:
? HP applied scientists created a wholly new Inkjet colour pressman which was simpler and less sophisticated to accommodate the demands of mass market. This was done after happening Epson’s less complex fabrication engineering which appealed to the consumers every bit good as to bring forth a low cost pressman. ?HP sellers demanded shops to set their pressmans alongside Epson’s. Here HP recognized the importance of advertisement and to catch customer’s attending to sale its merchandises.

?HP tripled its warranty period to three old ages in conformity to react to the customers’ need for dependability. ?As HP was a innovator in the field of inkjet pressmans and by patenting all its inventions it made the entry of all its rivals to the market merely more hard and had monopoly over the Inkjet pressman market in 1990s. It had about 50 patents to cover its engineering. ?By the clip HP had economic systems of graduated table like engineering. low production cost etc which helped it to cut down monetary values whenever any rival tested to come in the market to accommodate consumers. demand and demands. ?HP besides kept doing continual betterments in fabricating new pressmans with fluctuations. These schemes of HP made it a market leader and yielded tremendous overall growing consequences.

3 ) H-P cut the monetary value of its black and white pressman from $ 995 to $ 365. If the measure of such pressmans that it sold per twelvemonth increased tenfold. does this mean hat the ( discharge ) monetary value snap of demand for this merchandise was approximately 1. 8? Why or why non?


The expression for arc monetary value snap is as below:

By the given job.
= Initial measure of pressmans sold in 1988.
= Quantity demanded at present = 10 ( by the given status )
= Initial monetary value = $ 995
= Current monetary value = $ 365

So. = ( 10 – ) *2 / ( 10 + )
= 18/11 = 1. 636

And = ( 995-365 ) *2 / ( 995+365 )
= 0. 926

Therefore. Arc E = 1. 636/0. 926
= 1. 76 ( Ans )

Hence it may be concluded that arc monetary value snap for the merchandise was approximately 1. 8.

4 ) If you were hired by H-P to calculate how many inkjet pressmans it would sell following twelvemonth. how would you travel about making it? What information would you necessitate? What techniques would you utilize? How accurate do you believe your prognosis would be?


In order to calculate demand of Ink jet pressmans of HP in the following twelvemonth. we can utilize Time – Series Forecasting. which merely uses time-series history of variables to foretell future values. For this prediction method. we will necessitate all available informations refering to gross revenues volume of HP inkjet pressmans for each of the old old ages.

As indicated from the instance we can presume that sale of inkjet pressmans have increased steadily over the last few old ages. a Linear Trend Forecasting Regression theoretical account may be used. Assuming a additive relation between gross revenues and clip. we have

^Qt = a + bt
Where. Q =Sales for any twelvemonth
and T = Year of gross revenues

Using the method of least squares as the arrested development theoretical account. we would so look to gauge the values of ‘a’ and ‘b’ to a coveted degree of statistical significance. state 5 % . Thus we can be 95 % confident that the estimated values of ‘a’ and ‘b’ are right. Once the estimated values of ‘a’ and ‘b’ are available. we may replace them in the tendency equation and happen out the forecasted gross revenues for the following twelvemonth. Assuming that the additive tendency equation fits the existent universe demand for pressmans. we may be comparatively confident ( determined by the significance degree ) that our estimations are right. However this estimation precludes the possibility of any alteration in the bing market construction for pressmans. Entry of a new rival or a new sort of replacement can non be taken into history under such a theoretical account. While doing prognosis we must be careful to acknowledge that farther into the hereafter the prognosis will be made wider will the part of uncertainness due to happening of alteration in the bing market construction. which may do some turning points in variables of prognosis. Many times these turning points can non be predicted.


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