sealed air- aircap sarthak shah julia kim inggi winata aurelie operiol alexandre bonnier nelly...
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Sealed Air- AirCapSealed Air- AirCap
Sarthak Shah Julia Kim
Inggi Winata
Aurelie OperiolAlexandre BonnierNelly Tanizar Abe Feng
Translation (English
English) I love AirCap
bubbles, they always protect and I can pop them when I’m done!
(French English)
Look, this product made it through shipment well! It only has a few bruises on it!
US Market Recommendations
Part 1: Increase sales force Part 2: Enforce 35% Part 3: Educate end users Part 4: Test uncoated with
distributor
European Recommendations
England: Launch SIBCO Under the Sealed Air umbrella
France: Continue SIBCO Watch AirCap
Germany: Launch SIBCO Watch AirCap
SWOT, Weaknesses
How to market uncoated bubbles Selective distribution Inconsistent sales representatives
SWOT, Opportunities
Uncoated bubble sales increasing Europe becoming more price
sensitive Further AirCap growth in US
SWOT, Threats
GAFCEL in US, uncoated bubble maker
Sansetsu in Europe, Germany Quality uncoated bubbles Lower price
Declining coated bubble market (Europe)
US Market Recommendations
Part 1: Increase sales force Part 2: Enforce 35% Part 3: Educate end users Part 4: Test uncoated with
distributor
US Part 1: Increase sales force
4 additional salesmen More distributors = More sales Maintain Loyalty
First line distributors 6:1 Distributor/Salesmen ratio
Distributor capacity: 370 – 394 Makes financial sense
US Part 1: Increase sales force
Income of around $40,000 Adjusted for inflation ~ early 80’s
Fixed costs from salaries Increase 3.72%
Sales Increase 6.57%
US Part 2: Enforce 35%
Time: Instapak 60%, AirCap 35% Salesman currently ~ 20% to
AirCap Distributors currently unhappy Incentive
Increase AirCap Commission ~ 2.5% Happy distributors = more sales
US Part 3: Educate end users
Distributors not educating end users
End users don’t know AirCap advantages
End users will pull sale from distributors
Pamphlets 1 for every 5,000 sq ft
US Part 4: Testing uncoated
Test with large client on trial basis Large client: 2-3 first-line
distributors Less risk than in open market
Trial basis: 1 year trial
Uncoated Test Implications
Successful Uncoated
penetration Readiness
Not successful AirCap
dominance Hold US Market
European Recommendations
England: Launch SIBCO Under Sealed Air umbrella
France: Continue SIBCO Watch AirCap
Germany: Launch SIBCO Watch AirCap
Europe- England
AirCap still strong 68% Market Share
Good distribution Competitor: Sansetsu Uncoated cost
50% less than AirCap Uncoated bubble growth
Europe- England Launch SIBCO SIBCO unprofitable alone Under Sealed Air umbrella
Uses Sealed Air salesmen Uses AirCap distribution No additional investment
Expectations AirCap down, SIBCO up
Europe- England MARKETING SIBCO
Already buyingAlready buying Don’t mention SIBCO SIBCO still in
catalogue Emphasize AirCap
performance
Not buyingNot buying Briefly mention
SIBCO Alternative
SIBCO lacks AirCap’s performance
Europe- France SIBCO’s home Sealed Air – 31% Market Share
17% SIBCO 14% AirCap
Uncoated growth expected 1978- 50% coated, 50% uncoated 1980- 30% coated, 70% uncoated
Uncoated- 40% less than AirCap price
Europe- France
SIBCO Natural growth
Expect AirCap to lose market share AirCap no longer profitable
Pull the plug
Europe- Germany
AirCap late into market Never did well, Losing ground Sansetsu Domination
78% market share AirCap- 5.2% market share
Coated bubbles unpopular Uncoated cost- 35% of AirCap price
Europe- Germany
AirCap unprofitable Pull the plug
Introduce SIBCO SIBCO to use AirCap distribution,
sales No additional cost
Realistic Expectations
Financial Analysis Overview
Part 1: Increase sales force by 4 Part 2: Enforce 35% through
increased commission (2.5%) Part 3: Educate end users
through pamphlets ($0.50 pamphlets)
Sales Forecasts
6.5% Sales Increase 370 distributors w/ 713,000 sq ft. avg
volume per distributor 62 sales representatives 370/62 = 6 distributors per rep 4 new sales representatives 4*6 = 24 new distributors 24*713,000 -> 6.49% more business
Important Variables
Pamphlet Amortized Cost ($0.50 pamphlet) [variable]
Commission increase [variable] Number of new employees at
$40,000 salary [fixed]
Decision Possibilities (Exhibit 1)
Pamphlet Cost (Amortized)
Commission Number of Sales Reps ($40,000 salary)
Break-Even Point
Estimated Profit Increase
$0.10 2.50% 4 3.72% 2.75%
$0.10 2.50% 5 4.41% 2.07%
$0.10 2.50% 6 5.10% 1.38%
$0.50 3.00% 6 7.60% -1.07%
$0.50 3.50% 4 6.73% -0.22%
$0.50 3.50% 5 7.44% -0.91%
$0.50 3.50% 6 8.16% -1.59%
Break-Even (Exhibit 2)
AirCap Break-Even vs. Projections
0
2,000
4,000
6,000
Model/Grade
Volu
me
(100
0 sq
. ft.)
Break-Even Point
Projected Point
In-Depth Analysis (Exhibit 3)
Original contribution: $22.16 New contribution: $21.95
Extra commission Pamphlet cost
Break-Even: 3.72% Retain last years profits and cover the
$160,000 fixed costs Projected Sales Increase: 6.5%
Profits: +2.75%
Profit Estimations (Exhibit 4)
Profit Gain
5,700,000.00
5,800,000.00
5,900,000.00
6,000,000.00
6,100,000.00
1980 (jan-jun) Projected (6 months)
Year
European Market (Exhibit 5)
Fixed Costs: $0 Contribution
Germany: $10.94 France: $9.76 England: $2.66
Break-Even: 0 (profitable from the very first sale)
Conclusion
US Market US Market RecommendationsRecommendations
Part 1: Increase sales force Part 2: Enforce 35% Part 3: Educate end users Part 4: Test uncoated with
distributor
Conclusion
European RecommendationsEuropean Recommendations England: Launch SIBCO
Under Sealed Air umbrella France: Continue SIBCO
Watch AirCap Germany: Launch SIBCO
Watch Aircap
Overall Goals
Europe Market share in France, Germany
Sansetsu
US Maintain AirCap’s strength Monitor uncoated penetration