[Canty International] Marketing Plan [Castling, Chaudhry, Jones, Phan, Wang, Wong]

Introduction Canty International received a request for an important customer in the hotel industry. Decoline’s characteristics are that it is a durable, stain-resistant, sound conscious product that is also pleasing to the eye. It is custom designed for each client. Canty International must determine a reasonable price point that works both for Bryant Inns and themselves.

Problem What price point should Decoline be put at to be viable to produce and be purchased?

Key Findings Facts o Single client, Bryant Inns. o Competitive Advantage o Competitors product priced at $81.50 o Contacted Designlab, developed Decoline

Assumptions Only product being considered Cost of production will not substantially increase Bryant Inns has intent to purchase Can maintain sales of 500m² per month

SWOT Analysis Strengths o No current competition o Products fit buyer’s needs o Reliable and cost effective o Parent company helps with development o At cost production materials and no input transportation costs

SWOT Analysis Weaknesses o Each design has to be custom made o No production capacity to expand o Small target market o Customers must wait for 2 weeks

SWOT Analysis Opportunities o Create monopoly of wall tiling market o Market expansion while taking away from other wall coverings markets o The Inn’s gain: I.Less transportation cost II.Less installation cost III.Less maintenance IV.Custom tailored product to their specification V.Less lost revenue due to construction

SWOT Analysis Threats o Possible new competition o Increase of inputs rising o Unable to satisfy market demand o Market looks for other alternatives because of cost to buy and install o Cost of installation increases o Market changes from current track system

Competitive Analysis One competitor Competition product lifespan of two years Sells for $11.50m² not including a $4.80m² installation fee Does not offer same benefits as our Decoline Uses same track system as Decoline

Competitive Analysis ( ) x 5 = $81.50 X+5.40 = ( ) x 5 X+5.40=81.50 X=$76.10 m 2 $76.10 is the price equal to the competitor

Target Market Niche market within the hospitality sector B2B sales through professional buyers Micro marketing catered towards consumer Operates 150 Inns and growing Bryant Inns is not satisfied with current product

Fixed Costs (For 1 Month) Supervision1080 Inspection 165 Misc. Indirect Labour 84 Floor space327 Small Tools 30 Selling/Admin= 4300 – 1310(2/3) = Cutting Machine Amort. Expense 4 Tables Amort. Expense Total$

Variable Costs Techno-fibre = $6.55/0.9m 2 = Bamboo = $2.97/0.9m 2 = Cement = 0.83L/m 2 X 0.96c/L = Direct Labour hours =.184 hours/m 2 X 7.10/hr = Total Costs per square meter= $7.28/m 2 $3.30/m 2 $0.797/m 2 $1.306/m 2 $12.68/m 2

Alternative 1 Price Skimming  Advantages 1.Able to price Decoline at a high price 2.Built in value as it caters to customers 3.Competition will not be able to enter the market easily Competitor price= $81.50 for 10 years Decoline price= $90 for 10 years

Alternative 1 Price Skimming o Disadvantages 1.Relatively high unit cost 2.Produces small volumes of Decoline (maintains image) 3.Discontent for consumers. Buyers remorse

Alternative 2 Value-based price  Advantages 1.Profitable for Canty. 2.Accurate reflection of value to customer. 3.Introduces Decoline to the market as a high value product. Competitor price = $81.50 Decoline price = $62.90 Over a 10 year period

Alternative 2 Value-based price  Disadvantages 1.Esoteric. 2.Substantial jump in price from previous product. 3.Market perception.

Alternative 3 Price Penetration  Advantages 1.Competitor based 2.Simple to price 3.Customer responsive Competitor Price = $81.50/m 2 ten year period Decoline Price = ($23.12/m 2 x 30% markup) + $5.40/m 2 = $35.46/m 2 ten year period

Alternative 3 Price Penetration  Disadvantages 1.Not-profitable. 2.Predatory pricing? 3.Not really substitutes.

10 Year Price Alternative Comparision

Solution Value-based price Competitor price = $16.30 every two years = $81.50/m 2 every 10 years Decoline price = $62.90/m 2 every 10 years = Savings of $18.60/m 2 every 10 years Offers good value to customers and at the same time is still profitable Price although higher is still attractive to customers because of benefits

Implementation Plan Price: $57.50 (installation fee not included) Product: Customer Specific Decoline Place: While we don’t have stores, we use sales representatives to go to our customers Promotion: Our initial asking price is value based and lower over 10 years than competitors

Implementation Steps Find out specific design customer wants Put desired design into production (2 week lead time) Delivery and installation of Decoline

Plan B Alternative 1 Price Skimming Implementation plan the same Sales representatives quote the higher price and advantages over competition Will allow production to remain low as problems are worked out of the production line

Course Concepts SWOT Analysis Marketing mix (Target Market & 4Ps) Price Skimming (Alternative 1) Value-Based Methods (Alternative 2) Market Penetration Pricing (Alternative 3) Break Even Analysis B2B development and sales Market Expansion Niche Marketing Micro Marketing

References/Bibliography Marketing. Canadian ed. USA: McGraw- Hill, Print. Case Study 2