Big Fish Pre-Launch Meeting
In the past, Hook and Wabash had been very involved in new products and tended to make quick decisions. UWCI ’s growth forced Hook to take a step back from the launch process, while Wabash had cut back to part-time hours. There were many more employees involved in Big Fish than in past product launches, and Hart worried that the size of the group might threaten the focus and thwart decision making. She needed to finalize decisions on costs, pricing, and initial production volume.
At the start of the pre-launch meeting, Hart looked down the table, seeing Zac Phillips, Jake Smith, production director Bill Morrison, Clark Miu representing software and firmware, and Rosie Stevens representing hardware. Hart opened the meeting by asking Morrison to present his cost estimates. Morrison looked around grimly and did not mince words: “This thing’s expensive to build. It looks the same, but Big Fish’s got higher-end components and it’s more complex to manufacture.” He gave a high-level overview of product-cost breakdown and concluded by saying, “I’ll be blunt. You’re going to have to sell this product for a lot more than you thought. If anything, we have been too aggressive in our cost estimate. We can’t lower it beyond what I’ve presented.”
ZAC PHILLIPS: I know you think your estimates are sound, but that isn’t going to help us. With these numbers, we would have to sell Big Fish for $550 to maintain our margin. We’d be late to market and have a price point $100 over Boilermaker.
CLARK MIU: Bill, those cost estimates are surprisingly high. We tweaked the firmware without overhauling it, so it’s basically the same components. It doesn’t seem justified that the costs should come out as you say.
ROSIE STEVENS: I’m not sure, Clark. Those costs look realistic, given how my team upgraded the hardware. Sales probably just needs to reconsider how to position this thing. I think —
ZAC PHILLIPS: Wait, are we here to talk about positioning or pricing? Hook and I already figured out how we’ll position the product, so let’s just get the pricing straightened out.
BILL MORRISON: Well, we don’t perform miracles. The cost won’t change, and I’m not going to cut corners in production. I had my head handed to me the last time we had quality issues.
ZAC PHILLIPS: Jake, your designers must be able to tweak something, right? Hate to say it, but maybe you guys need to go back to the drawing board and figure out how to solve this problem.
JAKE SMITH: Zac , we’re well into a couple of other projects now. Frankly, I don’t think this is Sales’ call to make. We already put other projects on hold for Big Fish, and we’ve given you what you requested.
The discussion continued, but it became clear the group was at an impasse. Hart suggested ending the meeting: “Why don’t we wrap it up for now and meet again next week? In the meantime Bill and the Design team should look for opportunities to cut these costs.”
As the meeting adjourned, Phillips announced to the room, “If we can’t lower these costs and fix the finances on Big Fish, I can’t sell it. I won’t try.”