1. CASE #2: CANTY INTERNATIONAL JK AND THE IMPLEMENTORS FROM SET 1K BUDDY FMGT 1K MKGT 1102

2. Introduction Canty International  Manufactures wall systems/coverings  Receives RFP  Develops Decoline Bryan Inns  Multinational hospitality firm  Requires replacement wall system  Has specific requirements How can Canty International conquer competitors and gain the contract with Bryant Inns?

3. Key Findings  Canty International predicts a conservative sales potential of 500 square metres a month.  The installation costs are cheaper than current available products.  10 years service life  No comparable product

4.  large corporation  experience in the industry  known throughout the industry  funds and resources are readily available to tackle large contracts ASSUMPTIONS

5. FIXED COST

6. Variable Cost

7. Break Even Prices 500m 2 / monthly2000m 2 / monthly2598m 2 / monthly Variable Cost$6345$25,380$32,968.62 Fixed Cost$5,028.75$6,028.75 Total Cost$12,373.75$31,408.75$38,997.37 Break Even Price$24.75$15.70$15.01

8. Strengths  High production capacity  Up to 2598 square meters per month  Can accommodate large companies  Can accommodate International companies  Raw materials are produced in adjacent building eliminating transportation costs

9. Weaknesses  Has a narrow range of product lines  Assembly production generally produces at a 77% of optimum capacity

10. Opportunities  Environmental manufacturing  Lasts longer than competitors  Economic  New Technology  Installation Included

11. Threats  Small market  Economic downturn  Competitors  New technology

12. Competitive Analysis Soundproof foamCanty International Higher price Lower price No installation Installation Decorative Environmentally friendly

13. Target Market  Homeowners  Business owners  Renovators

14. Company Objective Customers  Profit-oriented - Profit Goal 18%  Target those value the increase in prestige such as Bryant Inns  Monopolistic competition – competition on products  Company’s own sales team  Based on customer's perceived value - Quality and service - Product value: save time and cost Channel members Competitions Costs

15. Advantages  High Prices = High Quality  High Profit Margins  Improvement  Attract Competitors  Low Demand  Perceived Value Disadvantages

16.  Initial low price  Cheap price of only $16.49 Company Objective = focus on marketshare Customers= homeowners/firms Costs= $16.49 Competition= price wars Channel Members= retailers + Canty’s Sales

17. Advantages  Build Market Share Fast  Discourage Competitors  Higher Demand  Low Profit Margins  Low Price = Low Quality?  Perceived Value  Canty International’s Image Disadvantages

18.  Promotions to Attract Customers  Initially, Higher Price  Introduce Promotional Pricing

19. Advantages  Attracts Customers  Higher Profit Margins  Stacks Well Against Competitors  Builds Loyalty  Draws in Competitors  Higher Profit Margins  Questionable Non- Sale Price  Perceived Cheap Option Disadvantages

20. Solution  Price Skimming Strategy Innovative New Product Lower Prices if Competitors Emerge Perceived High Value

21. Implementation Plan  Product Requirements  Price at $35.58 / m  Promotion at Regional Sales Office  Internationally Based (Place)

22. Plan B  Value Based and Promotional Pricing Attract Customers With Promotions Cash Discounts Quantity Discounts Durable Product = Gain Large Market Share

23. Course Concepts  Price Strategies  Price skimming  Price penetration  Value based  The five Cs of pricing:  Company objective  Customers  Costs  Competition  Channel members

24. Questions/Discussions  QUESTIONS??