kunst 1600.pptx

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CASE ANALYSIS:

COMMERCIALIZATION THEKUNST 1600 DRY PISTON

VACUUM PUMPGroup 14:

Jyotsna Gautam (PGP/16/026)

Preet Inder Verma (PGP/16/)

Nayanika (PGP/16/327)

Sahil Katyal (PGP/16/)Thomas Poignet( IE/

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BACKGROUND Evan Stone Senior Product Manager

Kunst, subsidiary of Alter GmbH.(Parent Co.)

Kunst sales touched a 75 yrs record $120 million

Manufactures top- end vacuum pumps for labs, healthcare and industrialapplications with a 60 % market share

Known for its competent technical service , reliable and accurate products

Competitors: AirMaster, Pump Wizard, Toledo Pump and Valve, VacuumTechnologies

Annual U.S. Sales potential:

Prospective market segments Residential AC repairs,

Home Refrigerator Repairs

Light Commercial Refrigerator Repairs

Market Segment Annual Sales potential

Home Refrigerator Repairs 60,000 units

Commercial Refrigerator Repairs 40,000 units

Residential AC Repairs 1.25,000 units

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SEGMENT-WISE RESEARCH FINDINGS

Residential AC Repair Segment

contractors owned vacuum pumps with a 3-6 CFM capacity

3 CFM model was most popular

Estimated Lifetime of the pump = 5 years

sales price:

3 CFM = $250

6 CFM = $320

On failure of vacuum pumps on the job, another pump can be brought to the site

Most repair firm owners considered vacuum pumps as disposable operatingsupplies

Oil should be changed after every job however, an average technician changes oilonce a week

Kunst 1600 did not require oil and oil changes Kunst 1600 had no brand recognition in the market

Participants recommended that pump could be better suited for home and lightcommercial refrigerators repairs

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HOME AND LIGHT COMMERCIAL REFRIGERATOR

REPAIR SEGMENT

On home refrigerator jobs, a 1 CFM capacity pump was used

Repair work is spread out evenly across the year

emergency repairs in light commercial work skyrocket during

the summers reduce vacuuming time by 10 minutes

AirMaster was the major competitor ( No.1 brand of 1 to 1.5CFM pumps)

None of the refrigerator owners or technicians knew about theKunst brand

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QUANTITATIVE ANALYSIS

Two FactorsOil Change cost saving

Incremental Profit will be calculated on the basis ofNumber of additional jobs per week

Differential price per year ( per year $ paid for pump)

Oil Changing Cost Saving has 4 elementsOil price

Labor cost

Clean-up suppliesOil disposal cost

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FOR RESIDENTIAL AC REPAIR SEGMENT

Cost savings per oil change

Cost of 1 quart - $8Labor - $12 per hour * ( half hour time for oil change)

Paper cost - .50 Soap scourge - .50

Oil disposal cost - $5 per gallon

Total Cost= $8 + ($12 x .5) + (.15 + .50) + ($5 x .25)= $15.90

Cost savings per year for oil changes

Cost savings per oil change x Number of oil changes per year

=$15.90 x 20 (oil changed once a week)=$318

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FOR RESIDENTIAL AC REPAIR SEGMENTCost savings per oil change

Cost of 1 quart - $4

Labor - $15 per hour * ( half hour time for oil change)



Total Cost= $4 + ($15 x .5) + (.15 + .50) + ($5 x.125)

= $12.775



=$12.775 x 12(oil changed once a month)

=$153.30

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FOR RESIDENTIAL AC REPAIR SEGMENT

Cost savings per oil change

Cost of 1 quart - $4

Labor - $15 per hour * ( half hour time for oil change)



Total Cost= $4 + ($24 x .5) + (.15 + .50) + ($5 x .125)= $17.275



=$17.275 x 12(oil changed once a month)=$207.30

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DIFFERENTIAL PRICE PER YEAR

This would be calculated as difference of Incumbent pump

price/Expected number of years& Kunst 1600 price/Expected

number of years

For Residential AC:

= ($250/2.5)($500/6)= $100 - $83.33= $16.67

For Home Refrigerator:

= ($150/3)($500/6)= $50 - $83.33= - $33.33

For Light Commercial Refrigerator

= ($200/2)

($500/6)= $100 - $83.33= $16.67

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INCREMENTAL PROFIT PER YEAR

Only for the light commercial refrigerator repair segment was it found

that using the Kunst 1600 would enable the contractor to perform

additional jobs

Is calculated based on

Number of additional jobs per week = 2

Average profit per job = 30

Weeks per busy season = 12

Profit = 2*30*12

= $720

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KUNST 1600 VALUE PER YEAR

Element Residential ACRepair Segment

HomeRefrigerator

Repair

Segment

LightCommercial

Repair

Segment

Oil ChangeSavings $318.0 $153.30 $207.30

Incremental Profi $0 $0 $720Total Value $318.00 $153.30 $927.30

Differential Price(peryear)

$ 16.6 - $ 33.3 $ 16.6

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CHOOSING TARGET SEGMENT

There are other popular brands in market and Kunst hasless brand equity so its necessary to create foothold intomarket

Hence focus should be on first entering into market using

one segment which is providing maximum customer value(Light Commercial Repair Segment)

It also eliminates the hassle of oil changes thus eliminatinglikelihood of fines due to illegal dumping of oil

Also it reduces repair job time by 10 minutes. Thus, the

value proposition of this market segment i.e to increasenumber of jobs per week(2) and cutting operating costs isbeing met by Kunst 1600

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THANK YOU !

kunst 1600.pptx

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