EEPM-04/IIMK

Case Analysis of KUNST 1600

Presented by Vineet Kumar Goyal (EEPM-04-046) Ashutosh Kumar (EEPM-04-004) Shailesh Awasthi (eMET-08-102)

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Major Issues

PRESENT CASE IS ABOUT POSITIONING AND SEGMENTATION OF KUNST 1600, A DRY PISTON VACCUM PUMP LAST PARA OF THE CASE: HOW TO BRING VALUE FOR CUSTOMERS, BRING DOWN OPERATING COST AND INCREASE REVENUE CRITICAL DECISIONS EVAN STONE(SENIOR PRODUCT MANAGER) NEED TO MAKE:
FIND TARGET SEGMENT & VALUE PROPOSITION FORMULATE MKTG STRATEGY FOR THIS PRODUCT

VALUE PROPOSITION
PROJECTED LIFETIME (PRICE/YEAR) OIL CHANGE SAVINGS

KUNST 1600 (KEY FEATURES):

A VERY DURABLE PRODUCT WHICH CAN LAST FOR 6 YEARS LIGHT IN WEIGHT, MADE FROM INJECTION MOULDED ALUMINIUM NO OIL CHANGE REQUIRED

KUNST, A MARKET LEADER IN LABORATORY, HEALTH CARE & INDUSTRIAL APPLICATIONS IS NOW PLANNING TO ENTER A NEW SEGMENT

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TARGET SEGMENTS

Actionable Recommendations
AVAILABLE BEFORE EVANS (PRODUCT MANAGER)

RESIDENTIAL AC REPAIR SEGMENT LIGHT COMMERCIAL REFRIGERATOR REPAIR SEGMENT HOME REFRIGERATOR REPAIR SEGMENT

VALUE PLACE HOLDERS: DURABILITY, WEIGHT DIFFERENCE, BRAND (-VE), RULE OF 7 (-VE) PRICE ELEMENTS
OIL CHANGE SAVINGS: RESIDENTIAL AC REPAIR SEGMENT
COST SAVING PER OIL CHANGE = OIL PRICE+LABOR COST+CLEAN UP SUPPLIES+OIL DISPOSAL COST

= $8+($12*0.5)+(0.15+0.50)+($5*0.25) = $15.90 COST SAVINGS PER YEAR = $15.90*20 = $318 LIGHT COMMERCIAL REFRIGERATOR =$4+($24*0.5)+(0.50+0.15)+($5*0.125)= $17.275 COST SAVING PER YEAR = $17.275*12 = $207.30 HOME REFRIGERATOR REPAIR SEGMENT = $4+($15*0.5)+(0.50+0.15)+($5*0.125) = $12.775 COST SAVING PER YEAR = $12.775*12 = $153.30 INCREMENTAL PROFIT PER YEAR
=NO. OF EXTRA JOBS PER WEEK* AVRG. PROFIT PER JOB* WEEKS PER SESSION LIGHT COMMERCIAL REFRIGERATOR =(2 JOBS/WK*$30)*12 WK = $60*12 = $720

DIFFERENTIAL PRICE PER YEAR = PUMP PRICE/EXP. LIFE (IN YEARS) KUNST 1600 PRICE/EXP. LIFE (IN YEARS) RESI. AC = ($250/2.5)-($500/6) = $16.66 LIGHT COMM. REF. = ($200/2) ($500/6) = $16.66 HOME REF. = ($150/3) ($500/6) = (-$33.33)

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Analysis
RESIDENTIAL AC REPAIR SEGMENT FACTORS OIL CHANGE SAVINGS INCREMENTAL PROFIT DIFFERENTIAL PRICE TOTAL VALUE $318 LIGHT COMMMERCIAL REPAIR SEGMENT $207.30 HOME REFRIGERATOR REPAIR SEGMENT $153.30

$0

$720

$0

$16.66

$16.66

-$33.33

$334.67

$943.96

$119.97

WE RECOMMEND EVAN TO CHOOSE LIGHT COMMERCIAL REPAIR SEGMENT AS ITS DELIVERING THE HIGHEST VALUE OF $943.96 TO THE CUSTOMER