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BACKGROUND: In 1985, UK entrepreneur, computer manufacturer and inventor Sir Clive Sinclair launched his latest new product, one that would revolutionize the world of personal transportation. The C5 was positioned as the world's first commercially produced electric car and priced at equivalent to $520 (at 1985 exchange rates). It was an unmitigated commercial disaster. Before the end of the year the price had dropped to the equivalent of $190 to clear unsold stock. In total 12,000 were produced and the C5 entered the record books as one of the worst marketing blunders of all time.
Fast forward to the Twenty First century, where we know better, right? In 2001, U.S. entrepreneur and inventor, Dean Kamen launched his latest new product, one that "would be bigger than the internet", (BBC, 2002) and revolutionize the world of personal transportation, a claim supported by fellow inventor and hi-tech guru, Steve Jobs, co-founder of Apple Inc. According to techsoc.org, a company Press Release of the time described the Segway as: "the first self-balancing, electric-powered transportation machine. With dimensions no larger than the average adult body and the ability to emulate human balance, the Segway HT uses the same space as a pedestrian, and can go wherever a person can walk. The Segway HT will allow people to go farther, move more quickly, and increase the amount they can carry anywhere they currently walk." (techsoc.org, 2008)
Amy Harmon writing in the New York Times indicated that Mr. Kamen saw the product as "a transportation choice that fills the niche between walking and driving", and that: "the Segway could cause cities to be redesigned, help wean the world from oil dependence, compress time and space for pedestrians and raise productivity for corporations and government agencies" (Harmon, 2001).
The elimination of poverty and the achievement of world peace were surely just around the corner. Prices were expected to be around $3,000, which was regarded as $2,000 too high by one commentator (Harmon, 2001). In 2003, sales were reported to have reached six thousand, far short of the expected sales figures of 50-100,000, when all sold Segways were recalled, (Kawamoto, 2003).
In 2008, a university professor browsing e-bay found a brand new Segway was priced at $4,998.95.
In answering the question make reasonable assumptions, (clearly you won't have the same information available to you as the actual manager, e.g. about costs, but make some assumptions and follow through in your analysis).
You should also bear in mind that a fundamental goal, as with all the cases you build in MKT501, is to stimulate your learning. Your answers should therefore aim to demonstrate that learning. In preparing your CASE5, ensure that you demonstrate your learning of the marketing concepts and frameworks for analysis outlined in the modular learning objectives. In particular, in answering the question, ensure that you demonstrate your understanding of promotion and factors affecting promotion success, as well as your learning from previous modules.