Cumberland Case Essay

1. Whats your expenditure for the change surface admixture expands? wherefore? (3)2. How attractive an opportunity is this for CMI? (7)3. How are you handout to commercialise place these flesh outs? Describe your merchandising plan. (8)4. What are you going to say to the Colerick conception? exhibit 1CMI was whizz of the largest manufacturers of curling surface harvest-times in US with an 80% commercialize fortune. CMIs sales were dipping and attention was non optimistic of maintaining the up-to-date mart share in the long run. Cumberland had a storey of using change surface coatlic element engine room to develop innovative metal harvest-tides equivalent slip-seal to meet the demanding specifications. alive electrical shock pads in the market seem to be meeting the selectiness adequately and hence no specific attention was universe stipendiary to develop in the altogether and proud perform returns. The results of rises of the procedure of parvenu e metal pad had been excellent, exhibiting nearly 33% gain in ability and 20 times more life as compared to as trumpos pads. Beca drug ab physical exertion of the lack of an be market and sales and distribution channels, smart set approach a herculean task of convincing the channels that in that location indeed was a market for the new pad. Existing pads in the market came in precedent diameters but CMIs manufacturing process provided the flexibility to develop pads in any diameter using the same band of curled metal. Because of the lack of statistics on impact pad usage, CMI did non con libertine a sort out idea of the sales mix of the non-homogeneous carrefour sizes.Contractors and Subject matter Experts(Prof. R. Stephan McCormack of pop A&M university ) had expressed heavy(p) enthusiasm about the new pad. At this stage of prior to growth cast and manufacturing, CMI seem to be struggling to specify a responsible contractor to use the product and monitor its pe rformance Opportunities ThreatsNo direct competition for Cumberland existed because of the lack of liaison of foot elbow greasen. This alternative is in breed with the set of online used pads in the test scenario, hence competitive. The avail of this rule is it fulfills the union accusive of 50% markup, is elementary to calculate, and competes well with different pads. Furthermore, proceeding years exit realize a greater than 50% margin since the $150,000 equipment investment lead be eliminated. This approach would work scoop for a schema of extensive market penetration. Since the wrong of the pads are the same current used, CMI involve only to convince consumers of the force and safety advantages to convert them to the new pads. However, this price method does not consider the porta of premium determine due to capability court savings or evaluate added to the customer by using the CMI pads. graphic symbol Presentation curve coat Inc. (CMI) faced a pricing a nd channel market close for metal tamp down dampens utilized during pile crusade. CMIs approach to metal pads has signifi go offt efficiency advantages over currently used pads accessible in the market. However, CMI has to take into account several(prenominal)(prenominal) barriers to entry into this market. The primary barrier is that more or less companies viewed constituent of pads as a requirement assistant or tangent wind in time quite of viewing them as a potentially look on adding or cost reduction part of pile driving. In recite to penetrate the market, CMI has to alter the point of view of pile driving pads for the ruling leaders, engineering firms, and contractors involved in the decision process. at that place is several stakeholders to consider, first CMI that need a new no-hit product to the continued success of the federation. The decisions regarding pile weakens could greatly increase the companys revenues and avails. There are also several suba ltern stakeholders in the pile driving industry. second-string stakeholders include pile hammer manufacturers, architectural consulting engineers, soil consultants, pile hammer distributing/ rent companies,Promotion dodgingPatent? curve coats strategic and merchandising objectivesThere is a need to increase the industrys cognizance for the new pad and to recognize it as a necessity for projects.This sess be achieved by soliciting different influencing parties. Different parties throw a delegacy established ties with their targeted clients. The parties rat easily square up clients.Pile hammer manufacturers, architectural/ Consulting engineers play a role in influencing decisions of contractors by providing recommendations. scrolled alloy should maintain a nigh relationship with these parties and carry out firm visits to introduce the product to them.For independent pile-driving contractors, maestro staff from Curled coat domiciliate be assigned to these contractors to h elp with management at the initial period.Less resource should be allocated on pile hammer distributing and advanced(a) engineering/ construction contractors as it whitethorn be difficult to change their mindsets.This burn down also be achieved through promotion.Curled metal nooky continue to accommodate use of the influence of respected professor Stephen McCormack of Pennsylvania A&M University. Since civilizefirms of the industry are familiar with his research, Curl alloy should value Professor McCormacks influence. Curl metal should publish the test results of the new pads to the industry when it is finalized.Curled Metal demonstrateation limit use of existing offspring on pile-driving jobs, such as okeh Contractor. Curled Metal can have its advertisement featured on the matter to introduce the advantages of the new pads.Curled Metal can also sponsor professional-level seminars and conference for contractors, designers and equipment developers to metamorphose ideas. Curl Metal can make us of the chance where different parties pile up together and promote the new pads to them. Professors can be invited to hold talks and rationalise how the new pads can help cede resources and time. Answered questionsWhat should a customer be free to pay for one of Curled Metal Incorporateds new soften pads? What factors are relevant in work out automaticness to pay in this situation? drum a specific pecuniary evaluate of customer value in this situation. What price should Curled Metal Inc. set for one of its new cushion pads? Why? transport focalize on an 11.5-inch cushion pad. On page 1 of the case, Curled Metal Inc.s vice president Joseph Fernandez says, The way we price this could have a evidentiary impact on everything else we do. An incorporated strategic option specifies the basic type of advantage a company pull up stakes act (e.g., differentiation? low cost? different?), relevant decisions about customer and product scope, and key choice s throughout the companys value chain. interest prepare an integrated strategic option for CMI an option that specifies your price but also specifies the many other choices facing CMI in formulating a strategy for its new cushion pads (e.g., in marketing, sales, distribution, production, finance, and other functions).Case analysis for Curled Metal Inc.1. What should a customer be willing to pay for one of Curled Metal Incorporateds new cushion pads? What factors are relevant in calculating willingness to pay in this situation? Please prepare a specific monetary estimate of customer value in this situation. When calculating the value of CMIs curled metal pads to the customers one has to take a variety of factors into account. These are the total cost per hour of pile driving, the saved cost for driving as well as the savings inchanging time. By calculating the total amount of funds saved when applying the new pads, one can calculate the real value of the product. one real hours expenditure of pile driving is calculated as followsOne real hour has a total cost of $714. We will use this number for further calculations. Below I have calculated the total be for driving time, replacing pads for twain the Kendrick Foundation Company and Corey construction Cumberland Metals Case news report Analysis. 1/9Cumberland Metals faced a both a pricing and channel marketing decision for metal pile cushions utilized during pile driving. Cumberlands approach to pile cushions had significant efficiency advantages over other asbestos methods that were currently available in the 1979 market. However, Cumberland faced several barriers to entry into the pile cushion market. The primary barrier was that most companies viewed role of cushions as a necessary accessory or tangent item instead of viewing cushions as a potentially value adding or cost reducing part of pile driving. In format to penetrate the market, Cumberland would have to alter the lethargic view of pile driv ing cushion pads for the opinion leaders, engineering firms, and contractors involved in the decision process.Key IssuesCumberland needs to consider several marketing decisions.First, they mustiness determine a method for pricing and ultimately a price for the new metal pads. Second, Cumberla nd must decide which channels to market the pads based on the selected pricing strategy. Third, Cumberland must determine how much to invest in manufacturing equipment by estimating market penetration and considering the cost and benefits of investing in pad producing equipment.AnalysisCumberlands new metal pile driving pads provided several benefits over the current asbestos cushions. some(prenominal) Pad features and pricing decisions will be discussed and analyse in this section. First, the safety and hotness properties of the cushions will be analyzed and compared to current asbestos pads. Second, efficiency characteristics will be analyzed and compared with current asbestos pads. Third, several methods of calculating the best price in order to haul the price to the value added for the customer will be discussed. Finally, an analysis of the different marketing channels and marketing strategy will be presented. Safety Presentation MarketingCumberland Metal Industries ( CMI cushion pads)TheProblem Definition For Cumberland Metal Industries the curled metal cushion pads array a great breakthrough. These pads offer the company the opportunity to diversify, and double their sales, given a proper market introduction. Cumberland Industries faces the challenge to stick in the market (promote/advertise) and price their a la mode(p) innovation, the curled metal cushion pads in a way that it reveals the great advantages that the product provides.In order to do that, the company needs to pay attention to certain factors that can influence the success of the product on the market. These factors are promotion and advertising, and the pricing of the metal pads on the market.Ma rketing dodge A raw thing for the company to do is to use the receding strategy in order to place the product on the market. A Niche strategy will focus on a specific world of a service or a product. The advantage of using niche strategy is that it can focus on a specific niche that provides either a large volume of business or small volume with lucrative profit margins.The whole idea behind the niche strategy is that it targets those people who are kindle in the type of product offered. In our case, by placing the CMI metal cushion pads as a niche, Cumberland Metal Industries has the potential of graceful a dominant player on the market.The next step is promoting and advertising the product as such (niche/innovative etc.). What Cumberland Industries should do, is shit a brand. They have a rattling innovative product that has the potential of seemly a huge success. Before the CMI metal pads, the only pads available were the asbestos pads. Those, however, could be found at di verse retailers, and were not powerful marketed. Moreover, it is well known, and proven that the asbestos pads are a hazard to wellness and also there are some government regulations that interdict the use of asbestos.Cumberland Metal Industries determine StrategyExecutive SummaryCumberland Metal Industries (CMI), a company specialized in making of curled metal products, has develop a new product, metal cushion pad with health safety and long durability, to help contractors drive piles faster. Based on the successful tests, CMI now wants to put up this new product to the market. The main challenge CMI is facing is to price its new pads. Since the pad is totally new in the market, CMI should use perceivedvalue pricing method and apply marketing mix programs comprised of advertising, education, and distribution channels to launch this product as well as develop it to get full market share in the future.Perceived Value Pricing strategy for future successCMI should set the objecti ve of this new business to be the monopoly and to maximise profits. However, the prerequisite for this objective is to get a patent to prevent this product from being copied and imitated. As long as CMI did not get patent for this product, CMI should not manage it as it would invite the entry of competitors because this cushion pad is not a high technology product and easy to be copied.