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Sealed Air- AirCap

Sealed Air- AirCap. Aurelie Operiol Alexandre Bonnier Nelly Tanizar Abe Feng. Sarthak Shah Julia Kim Inggi Winata. History. Bubble history Growth Uncoated bubble wrap threat European markets. (English  English)

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Sealed Air- AirCap

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  1. Sealed Air- AirCap Aurelie Operiol Alexandre Bonnier Nelly Tanizar Abe Feng Sarthak Shah Julia Kim Inggi Winata

  2. History • Bubble history • Growth • Uncoated bubble wrap threat • European markets

  3. (English  English) I love AirCap bubbles, they always protect and I can pop them when I’m done! (French  English) Look, this product made it through shipment well! It only has a few bruises on it! Translation

  4. US Market Recommendations • Part 1: Increase sales force • Part 2: Enforce 35% • Part 3: Educate end users • Part 4: Test uncoated with distributor

  5. European Recommendations • England: Launch SIBCO • Under the Sealed Air umbrella • France: Continue SIBCO • Watch AirCap • Germany: Launch SIBCO • Watch AirCap

  6. SWOT, Strengths • Market leadership • Innovation • Good Marketing and Sales • Loyalty of distributors

  7. SWOT, Weaknesses • How to market uncoated bubbles • Selective distribution • Inconsistent sales representatives

  8. SWOT, Opportunities • Uncoated bubble sales increasing • Europe becoming more price sensitive • Further AirCap growth in US

  9. SWOT, Threats • GAFCEL in US, uncoated bubble maker • Sansetsu in Europe, Germany • Quality uncoated bubbles • Lower price • Declining coated bubble market (Europe)

  10. US Market Recommendations • Part 1: Increase sales force • Part 2: Enforce 35% • Part 3: Educate end users • Part 4: Test uncoated with distributor

  11. US Part 1: Increase sales force • 4 additional salesmen • More distributors = More sales • Maintain Loyalty • First line distributors • 6:1 Distributor/Salesmen ratio • Distributor capacity: 370 – 394 • Makes financial sense

  12. US Part 1: Increase sales force • Income of around $40,000 • Adjusted for inflation ~ early 80’s • Fixed costs from salaries • Increase 3.72% • Sales • Increase 6.57%

  13. US Part 2: Enforce 35% • Time: Instapak 60%, AirCap 35% • Salesman currently ~ 20% to AirCap • Distributors currently unhappy • Incentive • Increase AirCap Commission ~ 2.5% • Happy distributors = more sales

  14. US Part 3: Educate end users • Distributors not educating end users • End users don’t know AirCap advantages • End users will pull sale from distributors • Pamphlets • 1 for every 5,000 sq ft

  15. US Part 4: Testing uncoated • Test with large client on trial basis • Large client: 2-3 first-line distributors • Less risk than in open market • Trial basis: 1 year trial

  16. Successful Uncoated penetration Readiness Not successful AirCap dominance Hold US Market Uncoated Test Implications

  17. European Recommendations • England: Launch SIBCO • Under Sealed Air umbrella • France: Continue SIBCO • Watch AirCap • Germany: Launch SIBCO • Watch AirCap

  18. Europe- England • AirCap still strong • 68% Market Share • Good distribution • Competitor: Sansetsu • Uncoated cost • 50% less than AirCap • Uncoated bubble growth

  19. Europe- England • Launch SIBCO • SIBCO unprofitable alone • Under Sealed Air umbrella • Uses Sealed Air salesmen • Uses AirCap distribution • No additional investment • Expectations • AirCap down, SIBCO up

  20. Already buying Don’t mention SIBCO SIBCO still in catalogue Emphasize AirCap performance Not buying Briefly mention SIBCO Alternative SIBCO lacks AirCap’s performance Europe- England MARKETING SIBCO

  21. Europe- France • SIBCO’s home • Sealed Air – 31% Market Share • 17% SIBCO • 14% AirCap • Uncoated growth expected • 1978- 50% coated, 50% uncoated • 1980- 30% coated, 70% uncoated • Uncoated- 40% less than AirCap price

  22. Europe- France • SIBCO • Natural growth • Expect AirCap to lose market share • AirCap no longer profitable • Pull the plug

  23. Europe- Germany • AirCap late into market • Never did well, Losing ground • Sansetsu Domination • 78% market share • AirCap- 5.2% market share • Coated bubbles unpopular • Uncoated cost- 35% of AirCap price

  24. Europe- Germany • AirCap unprofitable • Pull the plug • Introduce SIBCO • SIBCO to use AirCap distribution, sales • No additional cost • Realistic Expectations

  25. Financial Analysis • Overview • Part 1: Increase sales force by 4 • Part 2: Enforce 35% through increased commission (2.5%) • Part 3: Educate end users through pamphlets ($0.50 pamphlets)

  26. Sales Forecasts • 6.5% Sales Increase • 370 distributors w/ 713,000 sq ft. avg volume per distributor • 62 sales representatives • 370/62 = 6 distributors per rep • 4 new sales representatives • 4*6 = 24 new distributors • 24*713,000 -> 6.49% more business

  27. Important Variables • Pamphlet Amortized Cost ($0.50 pamphlet) [variable] • Commission increase [variable] • Number of new employees at $40,000 salary [fixed]

  28. Decision Possibilities (Exhibit 1)

  29. Break-Even (Exhibit 2)

  30. In-Depth Analysis (Exhibit 3) • Original contribution: $22.16 • New contribution: $21.95 • Extra commission • Pamphlet cost • Break-Even: 3.72% • Retain last years profits and cover the $160,000 fixed costs • Projected Sales Increase: 6.5% • Profits: +2.75%

  31. Profit Estimations (Exhibit 4)

  32. European Market(Exhibit 5) • Fixed Costs: $0 • Contribution • Germany: $10.94 • France: $9.76 • England: $2.66 • Break-Even: 0 (profitable from the very first sale)

  33. Conclusion • US Market Recommendations • Part 1: Increase sales force • Part 2: Enforce 35% • Part 3: Educate end users • Part 4: Test uncoated with distributor

  34. Conclusion • European Recommendations • England: Launch SIBCO • Under Sealed Air umbrella • France: Continue SIBCO • Watch AirCap • Germany: Launch SIBCO • Watch Aircap

  35. Overall Goals • Europe • Market share in France, Germany • Sansetsu • US • Maintain AirCap’s strength • Monitor uncoated penetration

  36. THE END http://www.urban75.com/Mag/bubble.html

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