Suppose you are tasked with launching a ""fire-fighter"" product to respond to a competitor’s price reduction on a product that competes with your mainstream consumer product (eg. smart phone). how would you use each of the 4 p’s to position your product as a competitive alternative to your competitor’s product?

Product - Smart watch that is an alternative to wearing sturdy phones around. A watch will have similar functionalities, with added ones that are based on its constant connection with the body.

Price - Since our competitor has launched the product first, this smart watch would be priced at a slightly lower point, in order to become a robust alternative to the smart phone.

Place - The distribution channels would be the same as the smart phone channels, as that is the way to provide customers with hands-on comparison.

Promotion - The advertising would be based mostly in magazines and TV, while sales promotions would aim to emphasize the functionalities of the smart watch, which the smart phone does not possess (without explicitly mentioning that).

Static  Budget =  $200,000

Flexible Budget= $208,000

Explanation:

Static Budget is based on standard activity that reflects that Rooney Company use 10,000 Direct Labour every month on Standard. In order get the direct Labour cost for static budget we use the following formula (Standard hour of activity x Standard direct labour cost per hour). The static budget for direct labour cost (10000 direct labour hour x $ 20 ) = $200,000.

In order to get flexible budget value for direct labour cost we use actual hour used and standard direct labour cost per hour. So flexible budget is (10400 direct labour hour x $ 20 per Labour hour ) = $208000