EEPM-04/IIMK

Case Analysis of KUNST 1600

Presented by
Vineet Kumar Goyal (EEPM-04-046)
Ashutosh Kumar (EEPM-04-004)
Shailesh Awasthi (eMET-08-102)
EEPM-04/IIMK
Major Issues

PRESENT CASE IS ABOUT POSITIONING AND SEGMENTATION OF KUNST 1600, A DRY PISTON VACCUM
PUMP

LAST PARA OF THE CASE: HOW TO BRING VALUE FOR CUSTOMERS, BRING DOWN OPERATING COST
AND INCREASE REVENUE

CRITICAL DECISIONS EVAN STONE(SENIOR PRODUCT MANAGER) NEED TO MAKE:

FIND TARGET SEGMENT & VALUE PROPOSITION
FORMULATE MKTG STRATEGY FOR THIS PRODUCT

VALUE PROPOSITION
PROJECTED LIFETIME (PRICE/YEAR)
OIL CHANGE SAVINGS

KUNST 1600 (KEY FEATURES):

A VERY DURABLE PRODUCT WHICH CAN LAST FOR 6 YEARS
LIGHT IN WEIGHT, MADE FROM INJECTION MOULDED ALUMINIUM
NO OIL CHANGE REQUIRED

KUNST, A MARKET LEADER IN LABORATORY, HEALTH CARE & INDUSTRIAL APPLICATIONS IS NOW
PLANNING TO ENTER A NEW SEGMENT
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Actionable Recommendations
TARGET SEGMENTS AVAILABLE BEFORE EVANS (PRODUCT MANAGER)
RESIDENTIAL AC REPAIR SEGMENT
LIGHT COMMERCIAL REFRIGERATOR REPAIR SEGMENT
HOME REFRIGERATOR REPAIR SEGMENT
VALUE PLACE HOLDERS:
DURABILITY, WEIGHT DIFFERENCE, BRAND (-VE), RULE OF 7 (-VE)

PRICE ELEMENTS
OIL CHANGE SAVINGS:
RESIDENTIAL AC REPAIR SEGMENT
COST SAVING PER OIL CHANGE = OIL PRICE+LABOR COST+CLEAN UP SUPPLIES+OIL DISPOSAL COST
= $8+($12*0.5)+(0.15+0.50)+($5*0.25) = $15.90
COST SAVINGS PER YEAR = $15.90*20 = $318
LIGHT COMMERCIAL REFRIGERATOR
=$4+($24*0.5)+(0.50+0.15)+($5*0.125)= $17.275
COST SAVING PER YEAR = $17.275*12 = $207.30
HOME REFRIGERATOR REPAIR SEGMENT
= $4+($15*0.5)+(0.50+0.15)+($5*0.125) = $12.775
COST SAVING PER YEAR = $12.775*12 = $153.30

INCREMENTAL PROFIT PER YEAR

=NO. OF EXTRA JOBS PER WEEK* AVRG. PROFIT PER JOB* WEEKS PER SESSION
LIGHT COMMERCIAL REFRIGERATOR
=(2 JOBS/WK*$30)*12 WK = $60*12 = $720

DIFFERENTIAL PRICE PER YEAR

= PUMP PRICE/EXP. LIFE (IN YEARS) KUNST 1600 PRICE/EXP. LIFE (IN YEARS)
RESI. AC = ($250/2.5)-($500/6) = $16.66
LIGHT COMM. REF. = ($200/2) ($500/6) = $16.66
HOME REF. = ($150/3) ($500/6) = (-$33.33)
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Analysis
RESIDENTIAL AC LIGHT HOME
REPAIR SEGMENT COMMMERCIAL REFRIGERATOR
FACTORS REPAIR SEGMENT REPAIR SEGMENT

OIL CHANGE $318 $207.30 $153.30

SAVINGS

INCREMENTAL $0 $720 $0
PROFIT

DIFFERENTIAL $16.66 $16.66 -$33.33

PRICE

TOTAL VALUE $334.67 $943.96 $119.97

WE RECOMMEND EVAN TO CHOOSE LIGHT COMMERCIAL

REPAIR SEGMENT AS ITS DELIVERING THE HIGHEST VALUE
OF $943.96 TO THE CUSTOMER