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Marketing scenario Essay

Introduction
Positioned as an premium offering focused to lowest overall cost to end users through superior overall performance.
Leader in quality , performance and technological innovation
Product lines
Carton sealing and industrial tapes
Specialized adhesives
Other packaging products
K2 tape – Manufactured using patented technology and a brand name for pressure sensitive carton sealing tape
Very high tensile strength and sheer resistance

Positioning

High Price

K2 Products

Low Quality

High Quality
Ipack
Tensile
New Product
Low Price

Problem Statement
• K2 tape competed against inferior economy grade products in carton sealing type
• IPACK offered 25-35% lesser price
• Revenue of K2- $68.6 million IPACK – $28.5 million in 2012
• Tensile – a new competitor had $2.7 million dollar sale with one sales representative

Should PST stay with high quality product or enter the economy grade segment ?

Option 1: Enter the economy grade
segment under the same brand
PROS
Access to the economy segment
Defend market share against competition
Diversification of product portfolio

CONS
Dilution of the brand image as a maker of technological superior product
Cannibalization of its own product offering
Cluttered product line

Option 2: Enter the economy grade segment
under different brand
Implications for:

PROS

CONS

Customer

• Ability to fulfill need of price sensitive customers

• Possibility of change in perception of being a quality leader

Distributor

• Possibility to offer a low end PST product

• Even wider product range; Limited sales force

Sales Force

• Ability to offer more variety in terms of price levels

• More effort to explain product differences

Brand

• No positive impact

• Negative impact on brand image

Option 2: Stay with high-quality products
Implications for:

PROS

CONS

Customer

• Maintaining image of quality
Leader

• Loss of Market share; Not targeting price sensitive consumers

Distributor

• No need for adjustment in distribution policy

• Low-price offer only from
competitor not from PST

Sales Force

• Consistent and easy product quality

• No ability to offer solution for price sensitive customer

Brand

• Consistent overall brand image

• No negative impact

Recommendation
PST should enter the economy grade segment

NEW BRAND

• New name (unrelated to PST) to avoid negative impact on brand image
• Marketed completely independent

PRODUCT LAUNCH

• Development and launch of two new products to compete with Tensile
• Competitive pricing strategy (similar to Tensile)

ENTER MARKET

• Make use of well established distribution network
• Offer economy equivalents for RD-48 & RDS-72

SUCCESS FACTORS
• There is a projected growth in demand (e.g. packaging segment 2.2%)
• PST has an established sales force and distribution network in the tape market
• There is a lack of brand loyalty of price sensitive customers (switching to PSTs new brand)
• There was suitable equipment and capacity for quick production

Distribution Plan
• Distribution through existing network for faster brand growth
• Hire more sales people to increase service quality & sales in PSTs tape business


Essay Topics:


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