Cumberland Metal Industries Essay Example for Free

Cumberland Metal Industries EssayIn its initial evaluation, the company believes that the new product, change surface metal shock absorber pads, has a potential for increasing the companys sales and profit and for diversifying the products it offers. Early demands for the product appear to be good, however an in-depth synopsis of the marketing aspect is necessary before the company can introduce the product to the market. Situational Analysis found on the two tallys made, it is clear that the company is in possession of a product that is better than any of those currently acquirable in the market. The question only is how much better this product is than the others already available. establish on the first trial performed, the product is 25% more efficient than its closest competitor in terms of feet of plenteousnesss driven per hour. It also increases the capacity of the operations by requiring less time for set changes of about 80%. Each set of the product also performs nineteen times better than state competitor. In the second trial, the product maintained its previous cognitive operation as far as feet driven per hour time for set changes is concerned.It surpassed its previous performance by performing forty-nine times better than its competitor. The efficiency and effectivity of the product translates to other forms of savings on the disunite of the user. First, the contractor or detergent builder pull up stakes decrease the cost of rental of the equipment used in the construction by at least 25%. If the workers compensation is computed based on the sum up of hours worked, the contractor or builder will incur savings amounting to 25% of the cost of labor.Aside from its efficiency the product can also decrease, on the part of the workers, the health risk usually associated with the use of asbestos and decrease employers expenses relating to workers health insurance in the long run. Actual figures of demand for the product are hard to calcul ate. Based on the assumptions made by Mr. Simpson that the construction indus leaven will need to drive 290 million to 390 million feet of piles annually, the total demand for the product annually is around 174,000 (290,000,000/10,000 x 6) to 324,000 (390,000,000/10,000 x 6) pads annually.To penetrate the market, the company will need to convince the key players of the construction industry that it should use the product. The approval of the architecture/ consulting firms, engineering science/construction contractors and independent contractors are a must since they are the ones that will actually use the products. Independent contractors could be targeted since they are more willing to try new products that can increase their profits. A positive review from this group can convince bigger firms to use the product.The approval of pile hammer manufacturers and pile hammer distributing/ renting companies will be good but not necessary. These two groups know that the use of the produc t will decrease their profits so they have motivation to not recommend the products to their customers. Pile hammer distributing/ renting companies can provide an efficient distribution channel and reduce the companys distribution cost since the mechanism is already in place, but not having the approval of this group is not essential since other methods of distribution are available to the company.Once amount of demand for the product is large enough this group can later decide to offer the product to their customers. Recommendations Initially, the pricing used by the company should be based on the data provided by the first test since it is more conservative. It can gradually increase its charges if the performance of the second trial is confirmed by actual practice. Based on the first trial, the company should charge $167 per pad. This price is computed by multiplying the cost of each set with the number of sets necessary ($50 x 20 pads) and dividing the result with the no. f pa ds of curled metal cushion required (1000/6).By using this price, the consumer will incur the same(p) amount of cost for cushion pads in a project whether it uses asbestos or the curled metal cushions it is only the amount of cushion pads used that will vary. However, this price does not charge consumer for the additional benefits provided by the product, such as 25% decrease in the cost of renting equipment and wages of laborers. This will be the merchandising point of the product upon its introduction.It will be important for the company to concentrate on building the confidence of the key players of the industry, sort of of maximizing the profits in the first few years of introducing the product. Marketing campaigns should be focused towards convincing the architecture/ consulting firms, engineering/construction contractors and independent contractors to use the products. It could try to market the products without delay to these groups since renting companies may be hesitant t o distribute products that will decrease the profits generated by the services they offered.Moreover, most contractors used their own pile hammers instead of renting, so distribution through these renting companies has limited reach. Independent contractors should be given particular attention, as far as efforts at direct sell is concerned, since these groups are more likely to try new methods that decreases their cost and increases their bottom line than the more established firms. When the reputation of the product is established, it can decide whether it will continue its direct approach or use the services of pile hammer distributing/ renting companies.For the reasons stated above, the demands of the Colerick Foundation Company should be accepted by the company since this would be the first of the companys direct sales. In summary, I would like to recommend that the company sell its curled metal cushion pads for $167 each. The company should first focus in building the reputati on of its product because of its innovative quality. One way of doing so is convincing the experts that it is better than anything else present in the market.