case study:. main event, facts & characters request for proposal received from bryants inns...
TRANSCRIPT
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Case Study:
Canty International
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Main Event, Facts & Characters
Request for proposal received from Bryants Inns (Diana Cromwell) to Bob Sweeney
Requested a substitute to replace wall
coverings(vinyl/paper based)
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Purchasing agent’s requirements:
Attractive
Fire resistantPass safety requirementsCompetitive in price(high
value)Sound proofDurable
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Facts on product produced
Techno-Fibre coverLightweight sturdy bamboo fibre core
Highly:--abrasion resistant, soil proof--Low maintenance, fire resistant, sound proofing
Estimated 10 year value
*All products are produced upon customers designated orders
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How can Canty International establish the value that Decoline will contribute to the industrial and commercial industry consumers?
Problem
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Numbers Breakdown
Break-Even Point = $24.75
At 500 m₂
Fixed Costs
Variable Costs
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Canty International is well established
No other products in the market are like Decoline
Canty International has the funds to develop Decoline
No other company has the advantage of a design lab
Assumptions
We assume:
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Competitive Analysis
Decoline doesn’t have any direct competition but they have a lot of competitors that offer similar style
products
Decoline lasts 5 times longer than the current products on the market
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SWOT Analysis
Strengths: The design lab allows
the company to produce a product that completely meets the customer’s request.
Making a greater profit due to the supply of high quality materials at minimum cost
Weaknesses: Not meeting current
capacity restrictions Problems at any area
of production may delay the process of making a product
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SWOT Analysis
Opportunities: Many growth
opportunities because of the design lab
Threats: Losing market shares
if their products don’t equal or surpass their competitors’ products
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•HOTELS•HOSPITALS•RESTAURANTS•RETIREMENT COMMUNITIES
Target Market
Hospitality and Service Industries
Focus on North
America
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Alternative #1: Price Skimming
Canty International will set high price for Decoline initially to maximize revenues
AdvantagesHigh price equates to high qualityHigh price will limit demand giving time to build
production capacitiesBetter to price too high than too low
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Alternative #1: Price Skimming
DisadvantagesCompetitors may enter the market with a lower
priceCompany may have high unit costs associated
with small volume productionsWhen the price drops past customers may feel
cheated
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Alternative # 2: Market Penetration
Initially set the price low to attract more consumers
AdvantagesLow price will build sales, market share, and
profits quicklyAs sales grow, costs drop, which causes the price
to dropDiscourages competitors because the profit
margin is low
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Alternative # 2: Market Penetration
DisadvantagesLower price will cause larger volumes, which
may cause the company difficulty to keep up with demand
Consumers may believe low price means low quality product
Company will have a hard time increasing selling price later
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Alternative # 3: Value-based
Decoline is prices to match Customer’s value perception
AdvantagesHigher the value perception, higher the salesDonation to charity increases company’s imageDecoline will perceived as prestigious, because of
their high prices
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Alternative # 3: Value-based
DisadvantagesConsumer research implementation costsIf consumer’s value perception of Decoline
decrease, less products are soldValue of products depends on how consumers
view them
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Solution
?Price
Skimming
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Price will be set at $49.50 to get 100% markup
Implementation plan
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Price is set at $30.99 to get 25% in markup
Plan B
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Break-Even Analysis Fixed costs Variable costs Break-even point
Pricing strategies Cost-based Competitor-based Value-based
Course
Concepts:Monopolistic competition
Price Skimming
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RFT requested for a product with certain specifications.
Current products in the market don’t measure up to Decoline.
Canty International is world renowned and that helps launch a new product into the market.
Key Findings
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Bibliography
Case reference materials: Marketing, Canadian edition• Dhruv Grewal, Michael Levy, Ajax Persaud and
Shirley Lichti; McGraw-Hill Ryerson, 2009
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Credits
Created by Group B
Sayali DeshmukhAman Dhaliwal
Kai Min (Leo) HuangLeslie McCollumBrittany PetersenEmily SandhackColin Williams