Marketing scenario Essay

Introduction Positioned as an premium offering focused to lowest overall cost to end users through superior overall performance. Leader in quality , performance and technological innovation Product lines Carton sealing and industrial tapes Specialized adhesives Other packaging products K2 tape – Manufactured using patented technology and a brand name for pressure sensitive carton sealing tape Very high tensile strength and sheer resistance Positioning High Price K2 Products Low Quality High Quality Ipack Tensile New Product Low Price Problem Statement †¢ K2 tape competed against inferior economy grade products in carton sealing type †¢ IPACK offered 25-35% lesser price †¢ Revenue of K2- $68.6 million IPACK – $28.5 million in 2012 †¢ Tensile – a new competitor had $2.7 million dollar sale with one sales representative Should PST stay with high quality product or enter the economy grade segment ? Option 1: Enter the economy grade segment under the same brand PROS Access to the economy segment Defend market share against competition Diversification of product portfolio CONS Dilution of the brand image as a maker of  technological superior product Cannibalization of its own product offering Cluttered product line Option 2: Enter the economy grade segment under different brand Implications for: PROS CONS Customer †¢ Ability to fulfill need of price sensitive  customers †¢ Possibility of change in perception of  being a quality leader Distributor †¢ Possibility to offer a low end PST  product †¢ Even wider product range; Limited  sales force Sales Force †¢ Ability to offer more variety in terms of  price levels †¢ More effort to explain product  differences Brand †¢ No positive impact †¢ Negative impact on brand image Option 2: Stay with high-quality products Implications for: PROS CONS Customer †¢ Maintaining image of quality Leader †¢ Loss of Market share; Not targeting  price sensitive consumers Distributor †¢ No need for adjustment in  distribution policy †¢ Low-price offer only from competitor not from PST Sales Force †¢ Consistent and easy product  quality †¢ No ability to offer solution for price  sensitive customer Brand †¢ Consistent overall brand image †¢ No negative impact Recommendation PST should enter the economy grade segment NEW BRAND †¢ New name (unrelated to PST) to avoid negative impact on brand image †¢ Marketed completely independent PRODUCT LAUNCH †¢ Development and launch of two new products to compete with Tensile †¢ Competitive pricing strategy (similar to Tensile) ENTER MARKET †¢ Make use of well established distribution network †¢ Offer economy equivalents for RD-48 & RDS-72 SUCCESS FACTORS †¢ There is a projected growth in demand (e.g. packaging segment 2.2%) †¢ PST has an established sales force and distribution network in the tape market †¢ There is a lack of brand loyalty of price sensitive customers (switching to PSTs new brand) †¢ There was suitable equipment and capacity for quick production Distribution Plan †¢ Distribution through existing network for faster brand growth †¢ Hire more sales people to increase service quality & sales in PSTs tape business