Kone Case

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CASE: (KONE: The MonoSpace Launch in Germany)

Problem:
KONE Aufzug is a new elevator business which is in the middle of planning the launch of their new product, “MonoSpace”, into Germany. KONE is challenged with the problem of how they should price and market the MonoSpace elevator without dismantling and destroying their existing product line. KONE knows that they can only market to low & mid-rise buildings of 12 floors or less due to its cabin requirements and operating speed; however the underlying problem of how to do a successful launch is a question Raimo Hätälä wishes to answer.

Alternative Solutions:

Alternative 1:
The marketing of the MonoSpace product is highly vital to the overall success of KONE. Currently 48% of sales in 1995 resulted in residential sales and of the 48%, 92% where PH (Hydraulic). Sales by types also show that nearly 90% of all elevators sold are either geared traction or hydraulic, and that 75% of all equipment sales comes from low-rise elevators. Therefore, KONE should market their product near the geared traction and above the hydraulic system, by doing this they would still keep all the benefits that the hydraulic product has to offer and slightly match the benefits of the geared traction minus its speed. Marketing the MonoSpace product at this position gives individuals the options of upgrading to the ecodisc from their current hydraulic system, while gaining the best value and investing themselves into new technology.

Pros: Nearly 90% of all sales are generated from PU and PH systems, which is where we would market the new product. Gives customers the option of upgrading to from Hydraulic system without much cost and eliminates potential fires and environmental hazards.

Cons: Many may only look for best value and not new technology; they just want the cheapest substitute. The German market consist of 60% hydraulic systems, so what will make them change to ecodisc if 50% of the decisions...
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