Case Study #2 IM-Impact Marketing

 Introduction  Problem  Target market  Data from industry  SWOT  Alternatives  Solution and Implementation  Concepts and References

 Well known manufacturer of wall coverings  Received RFP from Bryant inns  Bryant inns dissatisfied with current product  Bryant inns is Canadian branch of international company  New product Decoline  Estimates sales of 500m 2 Canty International

What pricing strategy would allow Canty International to generate a profit of $500,000 over the first year of launching the deco line product?

Two 30M hallways 21 rooms per floor 3 m ceilings Approx 63.5m 2 wall space per room 4mx5m room size Account for doorways windows etc. Total: 9,500m 2 of wall space.

 Metro Wall coverings $19.95-$35.95  Crown Wall covering and Fabrics $59.97-$84.99  Odyssey Wall coverings $28.95-$64.98 Average competitor price $49.13

 Financially stable  Well established  Good customer relations, exceptional sales team  That renovations are done during the slow season  Occupancy during the slow season is 40% or 8 out of the 21 rooms in our example hotel  That 4-8 installers would be working  That it would take 3-5 days to complete one floor  The hotel would only renovate 1-3 floors at a time, or a portion of a wing  That the cost of installation is equal to what we charge the customer.

Strengths Well established international company In house resources Weaknesses Produce to custom orders Low production capacity Contract dependant

Opportunities Future request for proposals New hotel developments Threats Competition Possible rise of inputs

 Designers, Project Managers, and Decision Makers of:  Hotels  Restaurants  Condominiums  Apartment buildings  And retail facilities

 Total fixed costs $  Materials and Labour to produce 500m 2 $5,  Total Costs to produce 500m2 per month =  Break Even price = per m 2  Floor price at 5% = per m 2  20% mark up = $30.85 per m 2  Profit per month $ at 500m 2

PROS  High profit  Perceived value  Brand equity CONS  Decreased target market  Lower priced competitors (c.c competitor-based Method) Average competitor price $49.13

Pros  Customer feels they are getting best bang for their buck  Sales will increase  Larger profit margin  Creates brand status Cons  Risks consumers aren't willing to pay more  Attracts new competition

Current Product (2yr) Selling Price $11.50 Installation $4.80 Total for 2yr $16.30/m 2 Total for 10yr $81.50/m 2 Metro Wall Coverings(5yr) Selling Price $27.95 Installation $5.40 Total for 5yr $33.35/m 2 Total for 10yr $66.70/m 2 Decoline Product (10yr) Selling Price $53.93 Installation $5.40 Total 10yr $59.33/m 2 International average rate per night is $149CAD Closing 1-3 floors at a time could potentially cost the hotel thousands of dollars in cleaning, extra labor needed to move furniture, and the loss in guests who do not want to stay at a hotel undergoing renovations.

 Uniform delivery pricing for Canadian customers  Quantity discounts 2% at 750m2 3% at 1000m2 5% at 5000m2  Cash discounts and payment terms 4/15, 2/30, 90/n

 Price for Bryant Inns would be $53.93 with a 10% discount, and terms of net 90 days. Sale Price $512, Installation Quantity disount Cash Discount 2/30 -10, GST +35, Total $537,305.64

 Price skimming slide 11  Brand value slide 13  Specialty goods slide 12  Target market slide 10  B2b tactics slide 16  Quantity discount slide 16  Cash discount slide 16  Premium pricing slide 12  Penetration pricing slide 11  Uniformed delivery pricing slide 16  Competative advantage slide 11,12,13  Positioning/repositioning slide 12  Break even, costs, etc excel spreadsheetexcel spreadsheet