Curled Metal
37801-Quantitative Marketing II : Pricing Strategies
Group Assignment 1
Curled Metal Case
1) What are the core benefits of the new pile pad product for a customer? (list both qualitative factors and factors that you can quantify based on the case).
Quantitative
1-Feet driven per hour performance-( hourly hammer,crane ,labour ,overhead cost)
2-Piles driven per set of pads
3-Number of pads used for each set
4-Time required per change of a set-( hourly hammer,crane ,labour ,overhead cost)
Qualitative
1-Inadequate pads have risk of cracking the pile
2-Most of pads are unbranded
3-There is no real way of distribution, manufacturers offer heavy supply houses carry
4-Distibutors have low absolute amount of margin in pads
5-Other products are made of hazardous materials
6-Heat hazard while the non-CMI pads are under operation
2) For those benefits that you can quantify, calculate the differentiation value of a pile pad. You should get a different number for Kendrick and Corey Construction.
In Exhibit 1 Calculation done according to the Kendrick parameters and used Exhibit 3 to calculate the cost of an hour which total system is waiting for either the replacement of pads or the time lost because of the performance of driving a pile is lower if conventional pads are used. According to the calculation performed, compared to Kendrick and Corey, CMI pads have a differentiation value of $4,254 and $5,702 respectively.
3) What is the reference product? What is the total EVC for a CMI pile pad? As the reference product the data is taken into account as shown in the Tables for Kendrick and Corey. Assumption is by disregarding the competition response(it is very innovative and totally different product), current pad cost of Kendrick and Corey should be the best alternative to use as reference. So it is basically $6.25/pad for Kendrick and $10/pad for Corey.
There are two different EVC need to be calculated. For Kendrick it is
Group Assignment 1
Curled Metal Case
1) What are the core benefits of the new pile pad product for a customer? (list both qualitative factors and factors that you can quantify based on the case).
Quantitative
1-Feet driven per hour performance-( hourly hammer,crane ,labour ,overhead cost)
2-Piles driven per set of pads
3-Number of pads used for each set
4-Time required per change of a set-( hourly hammer,crane ,labour ,overhead cost)
Qualitative
1-Inadequate pads have risk of cracking the pile
2-Most of pads are unbranded
3-There is no real way of distribution, manufacturers offer heavy supply houses carry
4-Distibutors have low absolute amount of margin in pads
5-Other products are made of hazardous materials
6-Heat hazard while the non-CMI pads are under operation
2) For those benefits that you can quantify, calculate the differentiation value of a pile pad. You should get a different number for Kendrick and Corey Construction.
In Exhibit 1 Calculation done according to the Kendrick parameters and used Exhibit 3 to calculate the cost of an hour which total system is waiting for either the replacement of pads or the time lost because of the performance of driving a pile is lower if conventional pads are used. According to the calculation performed, compared to Kendrick and Corey, CMI pads have a differentiation value of $4,254 and $5,702 respectively.
3) What is the reference product? What is the total EVC for a CMI pile pad? As the reference product the data is taken into account as shown in the Tables for Kendrick and Corey. Assumption is by disregarding the competition response(it is very innovative and totally different product), current pad cost of Kendrick and Corey should be the best alternative to use as reference. So it is basically $6.25/pad for Kendrick and $10/pad for Corey.
There are two different EVC need to be calculated. For Kendrick it is