Cumberland Metal Industries (CMI) should price their new cushioning pads at $900 to maximize profit. CMI should begin by targeting the customers that will find the greatest value in the product an pay the most. This allow the company to maximize unit contribution‚ and leave available options for dealing with future competition and sales challenges. Customer CMI estimates a potential customer base of 19‚500 to 26‚000 actively operating pile drivers in the United States. Currently the marketplace
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Metal Industries (CMI) is one of the largest metal manufacturers in the world. The company evolved from selling metal as a finished product to one that used it as a raw material‚ increasing sales from $250‚000 in 1963 to over $18‚500‚000 in 1979. Currently‚ CMI relies heavily on SlipSeal‚ which is used as a high-temperature sealant in automobiles. Although CMI dominates the market for this product‚ corporate sales figures decreased over the last year. As a result‚ the management at CMI realized the importance
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Presentation Marketing Cumberland Metal Industries ( CMI cushion pads) The Problem Definition: For Cumberland Metal Industries the curled metal cushion pads represent a great breakthrough. These pads offer the company the opportunity to diversify‚ and double their sales‚ given a proper market introduction. Cumberland Industries faces the challenge to Place in the market (promote/advertise) and price their latest innovation‚ the curled metal cushion pads in a way that it reveals the great advantages that
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Case Presentation Curled Metal Inc. (CMI) faced a pricing and channel marketing decision for metal pile cushions utilized during pile driving. CMI’s approach to metal pads has significant efficiency advantages over currently used pads available in the market. However‚ CMI has to take into account several barriers to entry into this market. The primary barrier is that most companies viewed role of pads as a necessary accessory or tangent item instead of viewing them as a potentially value adding or
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metal pads‚ Colerick Foundation Company and Fazio Construction are aware of the value added benefits and cost savings involved in the use of CMI pads and are eager to buy. These two companies are a perfect example of the makeup of the most profitable customer‚ the Independent pile-driving contractor. They are the frontline of the buying influence‚ and once that they are aware of the value added this product provides they can easily become our most profitable segment. It is essential that CMI supply
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Cumberland Metal Industries: Engineered Products Division‚ 1980 Overview: Cumberland Metal Industries (CMI) is one of the largest manufacturers of curled metal products in the U.S. The company started the business by making highly technical applications‚ but soon changed from selling the finished products to selling the products that were considered as raw materials for other products. By doing so‚ the company experienced a dramatic growth in the 1970’s and occupied 80% of the market share. However
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Metals Industries developed a new type of cushion pad for pile drivers made of curled metal. The 11.5 inch “Cumber-Coil” was tested by two different companies on two different projects and was found to far exceed the performance of the existing market-dominant product‚ the asbestos pad. The Cumber-Coil weighed half what the asbestos pad did and boasted a 33% faster driving time‚ 60% reduction in heat generated‚ and 400% less time wasted changing pads. The company that performed the first test
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1. What’s your price for the curled metal pads? Why? 2. How attractive an opportunity is this for CMI? 3. How are you going to market these pads? Describe your marketing plan. 4. What are you going to say to the Colerick Foundation? Exhibit 1: SWOT Analysis | | | | Strengths | Weaknesses | CMI was one of the largest manufacturers of curled metal products in US with an 80% market share | CMI’s sales were dipping and management was not optimistic of maintaining
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convince customers that their product is much more reliable and more performing than the cheaper one made of asbestos. Thus‚ CMI also needs to adopt several marketing-mix programs such as advertising and roles of influencers to spread and fix the perceived value in customers’ minds. The estimation of the CMI product’s price starts from taking into consideration only the 11 ½ pads because the company decided to focus on this segment at the beginning. So‚ the normal
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Nick Seffers Raphaël 1. What is the worth of the CMI cushion pad relative to the incumbent asbestos cushion pad? Build a customer value model including value elements‚ word equations‚ assumptions‚ and calculations based on the test results of both Colerick and Fazio. 1. Key quantifiable value and Price elements PRICE: * Price of the pads ( = $0 for both tests) * other resources needed for the job VALUE: * less pads needed per set * less time required for changing sets
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