Cumberland Metal Industries (CMI) should price their new cushioning pads at $900 to maximize profit. CMI should begin by targeting the customers that will find the greatest value in the product an pay the most. This allow the company to maximize unit contribution, and leave available options for dealing with future competition and sales challenges. Customer CMI estimates a potential customer base of 19,500 to 26,000 actively operating pile drivers in the United States. Currently the marketplace approaches cushion pads as an afterthought; pads are available for $2-$10 depending on size. The pads are produced by various local shops; CMI will be the first major industrial producer in the market. The introduction of a new and more expensive pad may require some time to gain acceptance in the market place. Many pads are purchased by equipment leasing companies whose incentive is to keep their equipment rented by prolonging the job; this may eliminate rental hammers from the initial market. The remaining market is divided into two groups; Independent contractors who may be skept....

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