Commercializing the Kunst 1600 Dry Piston Vacuum Pump

Topics: Microeconomics, Income, Part Pages: 2 (277 words) Published: January 26, 2011
From a quantitative perspective, the superior value and price of the Kunst 1600 can be attributed to these three elements.
Value Elements:

Cost savings due to the elimination of oil change expenses
and messiness -- Most owners and technicians trivialize oil change related costs.

Incremental revenue and profits –Incremental revenue and

profits refers to new income that can be attributed to greater product efficiency. In this case study, this occurs in only one segment – light commercial refrigerator repairs. In all other segments, repair firm revenues remain the same regardless of which pumps are used.

Price Element:

Increased pump durability -- The Kunst 1600 lasts 2 to 3 times

longer than the incumbents in most segments. This means that repair firms will have to buy more conventional pumps than Kunst 1600s. This impacts theprice a repair firm has to pay for
conventional pumps (i.e., 2 to 3 times greater) and not the number of jobs it can complete! In the economic sense, there is no
incremental profit merely greater price.
II. Value Placeholders For the most part, there are few differences among conventional pumps and the Kunst 1600. Here are a few

Weight differential – The Kunst 1600 is lighter than pumps

currently used in residential AC repairs and heavier than those used in home refrigerator and light commercial refrigerator repairs. These weight differences may impact technician preferences.

Durability of parts – As the Kunst 1600 is constructed of molded aluminum, its parts may be subject to less corrosion and thus last longer.

Brand equity – Currently, Kunst and Atler have little brand equity in the potential market segments. This may put them at a
competitive disadvantage with long-established rivals
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