...CAN FOR KONE : THE MONOSPACE Launch In Germany. SUBMITTED BY RAJESH KUMAR ,PRAVEEN & SONY EEPM : 04 IIMK Nov 1996 Raimo Hatala- Director of Konie Construction Industry slump, Low Differentiation among competiton, lead to low pricing and low margin in the Industry. Margin of Kone came down to 6% of turnover in 1st 8 mths of 1996. New Revolutionary Pdt- MONO SPACE. Concern of Raimo Hatala Size of Monospace in Germany.How to Price & position Monospace.How will it canabalize Sales of KoNes Existing Low ise elevators.Launch strategies? Elevator Industry: Mainly dominated by 5 companies..New Equipment mkt accounts for : 9 Billion Dollar & Servicing mkt for : 13 Billion Dollars . 80% of all service Contract were given to Original equipment manufactures. Elevator Technology Gearless-10%(High speed – high rise commercial building)Geared Traction-30%(Low raise building).Hydraulic -60%(50% low cost than Geared transaction But high on oil consumption) Machine Room Requirement Gearless Elevators: 11-15 Square meters, Geared Traction:11 Square meters,3 Fixed Placement option, TOP OF THE SHAFT (PT) LOWEST FLOOR(PU):Expensive because of complex roping arrangement. Slightly above top floor & to the side of the shaft(PS):Most expensive & least Common. Hydrulic Elevator machine room(PH): 5 square meters Total elevator Cost: 50% Equipment+50% for construction of shaft /machine room/Instalation cost. About KONE: Established in 1910 in...
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...1. KONE has targeted MonoSpace directly at Europe’s largest new-equipment market segment: low-rise residential elevators. Put yourself in Hätälä’s shoes and develop a detailed marketing plan for launching the MonoSpace in Germany. Kone was to launch the MonoSpace in the low-rise residential elevator market in Germany, which was its largest country market in Europe and vital to its overall success. 96% of elevators purchases in GER Kone has two real options: • They could market the product either both lines together MonoSpace and the hydraulic and the geared traction • They could position it as top of the line. Set a price for the MonoSpace (to facilitate comparison with prices of existing products as given at the bottom of case page 4, price a low-rise, 4-floor elevator) and specify clearly how it is to be positioned relative to the current product line (PH, PT, PU, or PS). MonoSpace fits relative to product lines. Based upon the above mentioned two options of MonoSpace launch plan, KONE can have the following two strategies to position MonoSpace in the elevator market, so that it should not cannibalize its own products and should be differentiated among its competitors. • Approach 1: Rather than adopting price-skimming strategy in extremely sensitive German market, KONE should price the MonoSpace similar to products offered by SCHINDLER and OTIS, but emphasize MonoSpace benefits to customers. • Approach 2: KONE should position MonoSpace above the...
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...Problem Statement: By 1996, KONE’s financial condition in Germany had deteriorated compared to previous years. Forecasts were bleak indicating little to no improvement for the near future. KONE business director, Raimo Hatala anticipated the launch of KONE’s latest offering, MonoSpace to improve the company’s financial position. Conversely, as initial test markets began, fears about the product’s ability to master the German market were raised. Hatala contemplated a successful entry strategy that would position the product appropriately and permit the company to leave a durable impression on the German market. Before the launch of MonoSpace in Germany, it was test marketed in select countries. Merely 40 units were sold in France although 300 were expected, even worse, no units were sold in the United Kingdom. The market became saturated; the construction boom terminated abruptly and demand for elevator gear was projected to fall by 15 percent. Competition for new installations was intense, large companies sold their equipment at or below cost to customers. Service contracts were commonly closed with companies that originally installed the equipment. Six major companies dominated the German market in 1995: Schindler, Otis and Thyssen, with KONE placing fourth. 150 small local companies, as well 30 mid-size players comprised the total market share. This resulted in a fragmented market. The largest construction companies controlled 20 percent of the market, while...
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...KONE: The MonoSpace Launch in Germany Nature of the Situation: KONE Aufzug is the Germanic branch of KONE from Finland. During November 1996 Raimo Hätälä, the New Elevator Business director, was planning to launch a new product in the low-rise building market. The elevator industry in Germany was highly competitive and mature. From 1995, when the construction boom ended abruptly, until 2000 they expected the demand to shrink by 15%. This provoked the prices to fell between 5% and 7% in 1994 and 1995, generating loses for Schindler and Otis (two of the six major competitors in Germany). The German low-rise building market was divided, as in other European countries, in geared traction technology (PU and PT), and hydraulic technology (PH) that accounted for 8% and 92% respectively. KONE’s new product, MonoSpace, was mainly characterized for its new technology, the EcoDisc, which provided a more comfort ride, did not need for a machine room, and reduced energy consumption. Before the launch of MonoSpace in Germany, it was test marketed in France, United Kingdom (U.K.) and The Netherlands. In the latest, MonoSpace was a complete success. It gave higher profits and 62% of the low-raise market (up from 52%). But in France only 40 units were sold of the 300 expected and in U.K. no units were sold during the first month after launch. Results that gave Hätälä cause for concern. Finally, a pre-launch had been done: During November 1995, 4 PH customers converted their orders to...
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...model, select a target market segment(s) for commercialization efforts. Justify your choice. Case: Preparation Questions 2. 3. 4. 4 5. Write a value proposition for the Kunst 1600 for the target market(s). SAP: Building a Leading Technology Brand 1. What should SAP stand for? What is its brand promise? 2. Would you make any changes in the branding elements? SAP brand architecture, logos? 3. How can SAP ensure consistent messaging and consistent look and feel in all SAP communications worldwide? 4. How can SAP leverage its brand to companies of all sizes? 5&6 Precise Software Solutions 1. Should Alon plan on introducing Insight at Openworld 2000? Why or Why not? 2. What should Precise strategy be for insight? Should they launch a separate sale force for the new product or sell it through their existing sales force? How good is...
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...MIB International Marketing Kone MonoSpace Case (for week 8 in-class discussion) For your consideration, but don't limit your exploration, analysis & recommendations to: This is a complex case with a lot of moving parts. It is usually used in the 2nd year of a 2-year MBA program, and often in either the capstone strategy course or an upper level marketing course. We are going to try to limit our analysis and discussion to a few of the key issues. You are not limited to addressing the questions found below, rather include anything else you feel to be important. • • • How important is this product launch in Germany for Kone? What are the implications for the company and it's future? What can be learned and applied from the prior launches in the 3 other countries? How does Germany's market differ and what approaches can be used to better ensure success there? This is a new product, and quite different from existing products. Different is not always better, and some markets are sometimes slow to adopt innovation. Summarize the new features and benefits for each market segment and DMU. How would you position the MonoSpace for launch in the German market? Which (who) are the major customer segments you think will respond favorably? Closely related, how would you price it? What are your pricing objectives and goals? (this is the heart of the case, explain and justify your choices here) How might Kone's competitors react to this product launch (based on your pricing and positioning...
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...strategy for launch the MonoSpace® in Germany is using low price to gain market share. This suggestion is based on the following reasons: First, the Germany market is shrinking. The expect market of Germany in year 2000 is 4000 renovating unit (26% of 15,500 unit in 1995) and 13,000 new unit. (85% of 15,500 unit in1995) Since ј of the expected market will be renovating projects, which cannot utilize the most significant strength of MonoSpace® (No machine room) I suggest we split the marketing strategy of MonoSpace® into two parts: renovation market and new equipment market. For renovation market, property developer, who primly concerned with the overall cost, will be the focus customers. We will emphasis the long-term cost saving for replacing an old elevator to a MonoSpace®, such as better energy saving benefit and lower maintain cost. For new equipment market, we will focus on architects, because most small contractors rely on architects to select elevators. Thus, property developers, general constructors, and architects will be our target customers. Second, mid-size player and “cowboys” count for a 35.5% German elevator market share. They are our main competitors in Germany market. Since the end of construction boom brought price competitions, which effectively squeezed the space for mid-size or small players, we should price the MonoSpace® at a low price in order to gain market share from those mid-size or small players. My suggested pricing police for MonoSpace® are to set...
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...|The case preparation questions are intended to help you identify and address the key issues in the case while preparing the case analysis note| |for each case before the discussion in the class. | |Session No & Date |Case: Preparation Questions | |1&2 |PV Technologies Inc: Were they asleep at the Switch? | | |What could be the reasons for the unfavorable evaluation of PV technologies by Greg Morgan? | | |Evaluate alternative course of action available to PVT to gain favorable evaluation by Solenergy for the Barstow | | |Project? | | |What short term and long term policies and processes should PVT develop and implement to effectively improve its | | |marketing programs? | |3 |Kunst 1600 | | |What are the major...
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