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Cumberland Metal Industries

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by

Sarah Garmisa

on 8 April 2014

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Transcript of Cumberland Metal Industries

Market Analysis
Targeting & Positioning
Marketing Mix
Background
Competition
Low Risk

Cushion materials in current usage fall into three groups
End grain hardwoods
0.25-0.5 inch thick asbestos pads with certain fillers
Aluminum plates alternating with disks of medium weave cotton with a phenolic resin compound
Market Size
Segmentation
Pile Hammer Manufacturers
Architectural/Consulting Engineers
Soil Consultants
Engineering/Construction Contractors
Pile Driving Contractors
Positioning
Time Saver
33% faster driving time
Less pad changes needed per job
Less cooling wait time

Safer Product
Low temperatures (250 vs 700 deg.)
Contains no asbestos

Targeting
Architectural/Consulting Engineers
Engineering/Construction Contractors
Pile Hammer Manufacturing companies
Independent Pile-Driving Contractors


Place
Construction Industry
Product
CMI Pads
Curled Metal wound tightly around a metal disk

Advantage
Three-dimensional resilience
Any diameter pad, from the standard
minimum of 11 1/2 inches to over 30 inches for a custom-designed application, could be produced
from the same band of curled metal.
Promotion
Architecture magazines and Newspapers.
Educational workshops with each of the influence players tailored to their needs/wants/industry position
Safety awareness workshops
Union Workers awareness workshops

Price
Conclusion
SWOT Analysis
Opportunities
Be an industry first
Contractors already desire this product
No producers exist in this field
Few channels distribute similar products
Strengths
Curled metal can be used for any size pad
CMI pads outperform traditional pads
Safer temperatures than asbestos
CMI can leverage existing capacity with minimal engineering overhead
Weaknesses
Threats
Limited information about the market
Competition: others could manufacture or copy the product
Contractors might not perceive the high value
Difficulty reaching potential customers because of lack of penetrative channels
Best Strategy
Perceived Value Pricing
is the best pricing strategy for the Cumberland Metal pads.

Set prices higher than existing industry standards

Brand CMI pads as the quality and performance leader
Reasoning
CMI can generate demand through marketing strategies that increase perceived value

Distinguish itself as an industry leader

Product tests prove performance superiority and drastic long-term cost savings
Price Boundaries
Price Ceiling
Unfamiliar with pile driving industry
No existing marketing channels
Information deficit in market
Uncertainty about performance of larger sizes
Larger pads could be difficult to handle
Price Floor

A Set of CMI Pads lasts 10,000 feet or approx. 7 jobs
Production Capacity is 250 per month x 12 months / 6 pads per set =
500 Sets Annually

DON'T BUY?
Price = $1699 (48% margin)
No B/E analysis
Profit (if sold out) = margin * 500 = $405,000
BUY?
Price = $799 (48% margin)
B/E units = $50,000 / $384 = 131 sets (<500)
Profit (if sold out) = margin * 369 = $141,696

Consider:
Goal = 9% market share (500/5,688)
Alternative ~ $10,000, but perceived price is one job at a time ($1,500)
$1,699 is a marketable consumer price.

There is no need to add capacity at this stage.
Should We Buy Equipment?
Inform consumers of their true costs on pads as a starting place

This will still provide a significant margin above COGS
Increase Perceived Value
To Become Price Leaders
Cumberland Metal Industries
is really Metex Corporation.
Metex Corp was founded in 1964 in Edison NJ. In 1989, Metex Corp was aquired by Union Capital Corp. (UCAP) and the name was changed to Metal Textiles Corp.

US4457499-Pile Driver Cushion Invented by Peter Townsend

(20 sets x $50 x 7 jobs)
(50 sets x $40 x 7 jobs)
Full transcript