We have recently started a new product line for Heavy Duty (Class 64) Mattresses and as a Customer Engagement Officer, you have been put in charge of setting up the prices. We are aware that our customers tend to use Bobmil prices as reference in Nairobi and Tuff Foam prices as reference prices upcountry during negotiations, to decide whether or not to stock our products. Two of our potential customers in Eldoret and Kisumu are supplied by Tuff foam and they receive a discount of 15% on both Medium Duty (class 23) and Heavy Duty (Class 32). Customer in Nairobi receive a 10% discount on the Bobmil price list. We have reasons to believe Tuff foam is the cheapest in the market and Bobmil the most expensive today. Here are the prices of our competitors before discounts are applied; 

Size	Tuff Foam Medium Duty	Tuff Foam Heavy Duty	Bobmil Heavy Duty
36*6	3010	3605	4966
42*6	3420	4120	5212
48*6	3860	4655	5458
54*6	4245	5175	6146
60*6	4745	5745	6828
72*6	5650	6870	8164

Additional Information:

2. The goal is to make sure our margins (i.e. profit divided by the selling price) fall in the range of 25% - 40% to make the product sustainable. For upcountry prices this margin should be after we have applied the upcountry transport cost
4. Transport cost do not apply for goods delivered within Nairobi
6. We are targeting to design a pricing strategy that can convince customers to stock our new product and allows for market penetration.
8. The class of the mattress (class 64, class 32 etc) indicates the density of the mattress. The density is associated with durability the higher the density the longer the durability
10. Most customers have either cancelled orders or cut down their orders basing their complaints on high prices.

Our transport costs upcountry and costs of production for each size are as below;

Size	Upcountry Transport Cost	Cost of Production
36*6	354	2375
42*6	371	2493
48*6	389	2610
54*6	438	2939
60*6	483	3245
72*6	579	3880

Based on the table above;

2. Please provide a price list for our HD mattresses for the sizes listed above specify if the prices differ between Nairobi and Upcountry and if yes why you think they should differ. Explain your rationale for picking those prices.

2. We are also planning to start an MD Mattress line soon because we have had a lot of requests from customers.
   2. Please specify what type of questions would you like to ask to your customer engagement manager and what type of information would you like to gather from the market to be able to determine what our price list for MD mattresses? Clarify why you would need this information and how would you use them.
   4. What type of information and guideline would you share with the production manager as she starts thinking about best way to produce the MD mattresses? Think about the information that you already have about the prices in the market.