Case #2: canty international jk and the implementors from set 1k buddy

1. Case #2: canty internationaljk and the implementors from set 1k buddy FMGT 1KMKGT 1102

2. Introduction Canty International • Manufactures wall systems/coverings • Receives RFP • Develops Decoline Bryan Inns • Multinational hospitality firm • Requires replacement wall system • Has specific requirements How can Canty International conquer competitors and gain the contract with Bryant Inns?

3. Key Findings • Canty International predicts a conservative sales potential of 500 square metres a month. • The installation costs are cheaper than current available products. • 10 years service life • No comparable product

4. ASSUMPTIONS large corporation experience in the industry known throughout the industry funds and resources are readily available to tackle large contracts

5. Fixed Cost

6. Variable Cost

7. Break Even Prices

8. Strengths • High production capacity • Up to 2598 square meters per month • Can accommodate large companies • Can accommodate International companies • Raw materials are produced in adjacent building eliminating transportation costs

9. Weaknesses • Has a narrow range of product lines • Assembly production generally produces at a 77% of optimum capacity

10. Opportunities • Environmental manufacturing • Lasts longer than competitors • Economic • New Technology • Installation Included

11. Threats • Small market • Economic downturn • Competitors • New technology

12. Competitive Analysis

13. Target Market • Homeowners • Business owners • Renovators

14. ALTERNATIVE 1 : Price Skimming CompanyObjective Customers • Profit-oriented - Profit Goal 18% • Target those value the increase in prestige  such as Bryant Inns • Monopolistic competition – competition on products • Company’s own sales team • Based on customer's perceived value - Quality and service - Product value: save time and cost Competitions Channel members Costs

15. Advantages Disadvantages • High Prices = High Quality • High Profit Margins • Improvement • Attract Competitors • Low Demand • Perceived Value

16. ALTERNATIVE 2 : Price Penetration • Initial low price • Cheap price of only $16.49 Company Objective = focus on marketshare Customers = homeowners/firms Costs = $16.49 Competition = price wars Channel Members = retailers + Canty’s Sales

17. Advantages Disadvantages • Build Market Share Fast • Discourage Competitors • Higher Demand • Low Profit Margins • Low Price = Low Quality? • Perceived Value • Canty International’s Image

18. ALTERNATIVE 3 : Value Basedand Specialty Promotional Pricing • Promotions to Attract Customers • Initially, Higher Price • Introduce Promotional Pricing

19. Advantages Disadvantages • Sell based on customer values • Innovators buy it first, fix bugs • Steal Customers from competition • Builds Loyalty • Draws in Competitors • Price Driven customers • Questionable Non-Sale Price • Perceived Cheap Option

20. Solution • Price Skimming Strategy • Innovative New Product • Lower Prices if Competitors Emerge • Perceived High Value

21. Implementation Plan • Product Requirements • Price at $35.58 / m • Promotion at Regional Sales Office • Internationally Based (Place)

22. Plan B • Value Based and Promotional Pricing • Attract Customers With Promotions • Cash Discounts • Quantity Discounts • Durable Product = Gain Large Market Share

23. Course Concepts • Price Strategies • Price skimming • Price penetration • Value based • The five Cs of pricing: • Company objective • Customers • Costs • Competition • Channel members

24. Questions/Discussions • QUESTIONS??