Name : Shivrinder Pal Roll No : EPGPKC05060

Q 1 : .Should Alon plan on introducing Insight at Openworld 2000? Why or Why not?

Points which can make Alon tempted to go for Open World 2000 are :

a. A good marketing platform for the new product with least expense in terms of cost and
time and maximum impact keeping in the view the number of people gathered in Open
World. Not only that this gathering consists of many decision making and influencers form
the top organizations.
b. As currently no one is offering end to end solution so it will the first mover advantage for
Precise while delaying the product beyond the Open World will give enough time to
competitors to exploit this new opportunity.

In spite of above advantages , my personal view is that Alon should wait for the 2001 open world
and keep this project secret from the market and competitors. A half-baked or immature product
if exposed to the market than it will be noticed and taken up by the competitors and there may
be a chance the Precise will lose the opportunity of first movers in the market. As it is
mentioned that even the basic GA module will take 18 months so it is better to wait till the
next open world rather than going in the market with testing version. This view can be
supported by the following points.

a. Undeveloped or underdeveloped product i.e. with not complete functionality and backfire
and may create a disinterest among the prospective customers even before its launch..

b. There is a risk of exposing the idea to the competitors, it will allow them to come up with
better alternative solutions and Precise will lose the opportunity of first movers in the
industry.

c. Product positioning, pricing and sales strategy is still not clear and under discussion so
without finalizing and strategizing that can put a dent on the image of Precise.

Q2. What should Precise strategy be for insight? Should they launch a separate sale force for the
new product or sell it through their existing sales force? How good is their current salesforce?
As this product is going to be a premium with high ticket value, therefore it should be presented
in a very consultative way. The value elements and benefits should be explained. Therefore, a
direct selling approach should be more effective. Precise must have a trained and dedicated
sales force with expertise of presenting end to solution concept to the customers. Also, Insight
being new to market, and not an established product, so selling it through VARs, and system
integrator may not be a good idea. Precise can use these channels once the product is
established. Precise should hire highly experienced guys to communicate the perceived value
addition of the product to decision makers of prospective clients.
Q3.How should Insight be priced? Develop an ROI model for Precise/SQL product.
Based on data provided in Exhibit 4 , the below calculation may be helpful for deciding the price of
Insight :

Savings on DBA :

Assuming they work 40 hours a week 40

Hours saved per DBA per week 9.4
Average DBA salary $ 60000
Hours worked Per Year 2080 i.e. 52 weeks @ 40 hours per week
Hours Saved per year 488.8 i.e. 52 weeks @ 9,4 Hours saving per week
Savings Per DBA 14100 Savings per year per DBA
Number of DBAs 10
Savings for all DBAs 141000

Savings on Hardware:

Average Annual Hardware Budget affected 14,30,000

Hardware Saving if postponed purchase by 1 year 429000 i.e. 30% savings on the budget
Probability of postponing by 3 months 107250 I.e. saving for 3 months 107250/4
Savings 64,350 I.e. 60% of 3 months savings.

Savings on End Users :

Salary of End User 30,000

Average Employee Burden Rate 9900 i.e. @ 33% of Salary
Saving per user 2475 i.e. 25% of Burden rate
Average number of users 215
Total savings for End user 532125 I.e. 2475 * 215

Total Savings A+B+C 7,37,475