Sarthak Shah Julia Kim Inggi Winata Sealed Air- AirCap Sarthak Shah Julia Kim Inggi Winata Aurelie Operiol Alexandre Bonnier Nelly Tanizar Abe Feng

History Bubble history Growth Uncoated bubble wrap threat European markets

Translation (English  English) I love AirCap bubbles, they always protect and I can pop them when I’m done! (French  English) Look, this product made it through shipment well! It only has a few bruises on it!

US Market Recommendations Part 1: Increase sales force Part 2: Enforce 35% Part 3: Educate end users Part 4: Test uncoated with distributor

European Recommendations England: Launch SIBCO Under the Sealed Air umbrella France: Continue SIBCO Watch AirCap Germany: Launch SIBCO

SWOT, Strengths Market leadership Innovation Good Marketing and Sales Loyalty of distributors

SWOT, Weaknesses How to market uncoated bubbles Selective distribution Inconsistent sales representatives

SWOT, Opportunities Uncoated bubble sales increasing Europe becoming more price sensitive Further AirCap growth in US

SWOT, Threats GAFCEL in US, uncoated bubble maker Sansetsu in Europe, Germany Quality uncoated bubbles Lower price Declining coated bubble market (Europe)

US Market Recommendations Part 1: Increase sales force Part 2: Enforce 35% Part 3: Educate end users Part 4: Test uncoated with distributor

US Part 1: Increase sales force 4 additional salesmen More distributors = More sales Maintain Loyalty First line distributors 6:1 Distributor/Salesmen ratio Distributor capacity: 370 – 394 Makes financial sense

US Part 1: Increase sales force Income of around $40,000 Adjusted for inflation ~ early 80’s Fixed costs from salaries Increase 3.72% Sales Increase 6.57%

US Part 2: Enforce 35% Time: Instapak 60%, AirCap 35% Salesman currently ~ 20% to AirCap Distributors currently unhappy Incentive Increase AirCap Commission ~ 2.5% Happy distributors = more sales

US Part 3: Educate end users Distributors not educating end users End users don’t know AirCap advantages End users will pull sale from distributors Pamphlets 1 for every 5,000 sq ft

US Part 4: Testing uncoated Test with large client on trial basis Large client: 2-3 first-line distributors Less risk than in open market Trial basis: 1 year trial

Uncoated Test Implications Successful Uncoated penetration Readiness Not successful AirCap dominance Hold US Market

European Recommendations England: Launch SIBCO Under Sealed Air umbrella France: Continue SIBCO Watch AirCap Germany: Launch SIBCO

Europe- England AirCap still strong Good distribution 68% Market Share Good distribution Competitor: Sansetsu Uncoated cost 50% less than AirCap Uncoated bubble growth

Europe- England Launch SIBCO SIBCO unprofitable alone Under Sealed Air umbrella Uses Sealed Air salesmen Uses AirCap distribution No additional investment Expectations AirCap down, SIBCO up

Europe- England MARKETING SIBCO Already buying Don’t mention SIBCO SIBCO still in catalogue Emphasize AirCap performance Not buying Briefly mention SIBCO Alternative SIBCO lacks AirCap’s performance

Europe- France SIBCO’s home Sealed Air – 31% Market Share 14% AirCap Uncoated growth expected 1978- 50% coated, 50% uncoated 1980- 30% coated, 70% uncoated Uncoated- 40% less than AirCap price

Europe- France SIBCO Expect AirCap to lose market share Natural growth Expect AirCap to lose market share AirCap no longer profitable Pull the plug

Europe- Germany AirCap late into market Never did well, Losing ground Sansetsu Domination 78% market share AirCap- 5.2% market share Coated bubbles unpopular Uncoated cost- 35% of AirCap price

Europe- Germany AirCap unprofitable Introduce SIBCO Pull the plug Introduce SIBCO SIBCO to use AirCap distribution, sales No additional cost Realistic Expectations

Financial Analysis Overview Part 1: Increase sales force by 4 Part 2: Enforce 35% through increased commission (2.5%) Part 3: Educate end users through pamphlets ($0.50 pamphlets)

Sales Forecasts 6.5% Sales Increase 370 distributors w/ 713,000 sq ft. avg volume per distributor 62 sales representatives 370/62 = 6 distributors per rep 4 new sales representatives 4*6 = 24 new distributors 24*713,000 -> 6.49% more business

Important Variables Pamphlet Amortized Cost ($0.50 pamphlet) [variable] Commission increase [variable] Number of new employees at $40,000 salary [fixed]

Decision Possibilities (Exhibit 1) Pamphlet Cost (Amortized) Commission Number of Sales Reps ($40,000 salary) Break-Even Point Estimated Profit Increase $0.10 2.50% 4 3.72% 2.75% 5 4.41% 2.07% 6 5.10% 1.38% $0.50 3.00% 7.60% -1.07% 3.50% 6.73% -0.22% 7.44% -0.91% 8.16% -1.59%

Break-Even (Exhibit 2)

In-Depth Analysis (Exhibit 3) Original contribution: $22.16 New contribution: $21.95 Extra commission Pamphlet cost Break-Even: 3.72% Retain last years profits and cover the $160,000 fixed costs Projected Sales Increase: 6.5% Profits: +2.75%

Profit Estimations (Exhibit 4)

European Market (Exhibit 5) Fixed Costs: $0 Contribution Germany: $10.94 France: $9.76 England: $2.66 Break-Even: 0 (profitable from the very first sale)

Conclusion US Market Recommendations Part 1: Increase sales force Part 2: Enforce 35% Part 3: Educate end users Part 4: Test uncoated with distributor

Conclusion European Recommendations England: Launch SIBCO Under Sealed Air umbrella France: Continue SIBCO Watch AirCap Germany: Launch SIBCO Watch Aircap

Overall Goals Europe US Market share in France, Germany Sansetsu US Maintain AirCap’s strength Monitor uncoated penetration

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