Case Study : Product Line Extension Dilemma

1. Case Study: Product Line Extension Dilemma • Group: The MetamorphsLilia Griselle, Davide Santini & Leo Loison. • Our strategic position in a glance:

2. Justifications of our position: • Ecoplus Wide isbeingsoldat $134.44. • EstimatedSTP’scosts for producing a similarlow-costproduct: $107.95. • To becompetitivetherewouldbe a marginlowerthan $26.49. ($134.44 – $107.95).

3. Recommendations: • Use of special offers and sales promotions to target markets with a more elastic demand and price sensitivity (like the Boston area). • The goal is to convince customers that by buying good quality products they will save money in long terms. • E.g. sell double packs of GP at a cheaper price than 2 Tenesal’s. • Assignment of a salesperson to each of the 10 distributors that generate the highest percentage of tape sales. Then, divide the next 115 distributors equally to the others. This way, each sale force is responsible for his 3 to 4 distributors. • Find out which way they feel more motivated to do their work: by getting salary and 2 percent commission or high commission but no salary. • According to exhibit 3, a preliminary forecast of demand could be pointing to keep concentrating in covering the adhesive and sealants demand and research more about the construction, manufacturing and assembly markets. • Indeed, it appears that the demand for adhesive and sealants within these markets is actually growing. • Research if the feature of 50 mm is something that customers prefer versus 48 mm. • Perhaps instead of developing a whole new product again, they could adapt the GP to have the same features. • And then compete with the TenesalEcoplus wide or Ecoslim without losing their properties of material. • Product brands and models names too similar and confusing. • The company has to develop sub-brand names to differentiate the products targeting different markets. The actual sequential naming is not sane for the company. • The brand names of the products should describe the uniqueness of each and be more understandable not only to engineers but also to customers. • The objective here is to underline the difference of quality between our products and the one of the competition Educating sales force steadily about their offerings and motivating them by sales force promotions. Ex.:create an intern competitions: “The highests distributors sells” showing results, giving bonus to the bests and educating the worst more about selling approach.