Case Study:

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)

Purchasing agent’s requirements:  Attractive  Fire resistant  Pass safety requirements  Competitive in price(high value)  Sound proof  Durable

Facts on product produced Techno-Fibre cover Lightweight 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

How can Canty International establish the value that Decoline will contribute to the industrial and commercial industry consumers?

Numbers Breakdown Break-Even Point = $24.75 At 500 m ₂ Fixed Costs Variable Costs

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

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

SWOT Analysis Strengths: TThe design lab allows the company to produce a product that completely meets the customer’s request. MMaking a greater profit due to the supply of high quality materials at minimum cost Weaknesses: NNot meeting current capacity restrictions PProblems at any area of production may delay the process of making a product

Opportunities: MMany growth opportunities because of the design lab Threats: LLosing market shares if their products don’t equal or surpass their competitors’ products

HOTELS HOSPITALS RESTAURANTS RETIREMENT COMMUNITIES Target Market Hospitality and Service Industries Focus on North America

Alternative #1: Price Skimming Canty International will set high price for Decoline initially to maximize revenues Advantages High price equates to high quality High price will limit demand giving time to build production capacities Better to price too high than too low

Alternative #1: Price Skimming Disadvantages Competitors may enter the market with a lower price Company may have high unit costs associated with small volume productions When the price drops past customers may feel cheated

Alternative # 2: Market Penetration Initially set the price low to attract more consumers Advantages Low price will build sales, market share, and profits quickly As sales grow, costs drop, which causes the price to drop Discourages competitors because the profit margin is low

Alternative # 2: Market Penetration Disadvantages Lower 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

Alternative # 3: Value-based Decoline is prices to match Customer’s value perception Advantages Higher the value perception, higher the sales Donation to charity increases company’s image Decoline will perceived as prestigious, because of their high prices

Alternative # 3: Value-based Disadvantages Consumer research implementation costs If consumer’s value perception of Decoline decrease, less products are sold Value of products depends on how consumers view them

Solution ?

Price will be set at $49.50 to get 100% markup

Price is set at $30.99 to get 25% in markup

Break-Even Analysis  Fixed costs  Variable costs  Break-even point Pricing strategies  Cost-based  Competitor-based  Value-based Monopolistic competition Price Skimming

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

Bibliography Case reference materials: Marketing, Canadian edition Dhruv Grewal, Michael Levy, Ajax Persaud and Shirley Lichti; McGraw-Hill Ryerson, 2009

Credits Created by Group B Sayali Deshmukh Aman Dhaliwal Kai Min (Leo) Huang Leslie McCollum Brittany Petersen Emily Sandhack Colin Williams