Kone Case
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KONE CASE HBS
Purpose of the Report KONE Aufzug’s elevator business was suffering from region-wide construction slumps, increased price competition, and margin erosion within the elevator industry. Their operating income was falling significantly and they projected to report after –tax income of zero earnings in the next year. Raimo Hatala, director of KONE Aufzug’s elevator business, knew he had to introduce a new product to revolutionize the elevator industry and increase KONE’s downward trending operating profit. KONE designed a revolutionary product called Monospace, which had the potential to capture significant market share. KONE managers, however, weren’t quite sure how they would take Monospace to market. KONE managers had to decide what segment of the market they were going to target, how they were going to penetrate this segment, and how they could quantify the overall economic value of their product to their potential customers.
Recommendations
The marketing strategy that we chose for KONE Aufzug was to advertise their product at trade shows, sales visits, and exhibitions such as Konstructor. We also chose to install fully functional Monospace elevators in all regional offices throughout Germany in order to demonstrate the potential benefits of this revolutionary new product first hand to our customers. Monospace elevators will come with a price guarantee between initial quotes to final delivery. This will alleviate any financial anxiety that our customers might have about dealing with a single supplier. Furthermore, we recommend that KONE set the price of the new Monospace elevator at DM 85,000 and increase their sales force, especially in regards to introducing new products, in order to compete with their competitors.
Analysis
KONE Monospace is a revolutionary machine-room-less elevator that yields significant advantages over other designs. The gain of additional usable space for revenue-generating purposes and the greater
KONE CASE HBS
Purpose of the Report KONE Aufzug’s elevator business was suffering from region-wide construction slumps, increased price competition, and margin erosion within the elevator industry. Their operating income was falling significantly and they projected to report after –tax income of zero earnings in the next year. Raimo Hatala, director of KONE Aufzug’s elevator business, knew he had to introduce a new product to revolutionize the elevator industry and increase KONE’s downward trending operating profit. KONE designed a revolutionary product called Monospace, which had the potential to capture significant market share. KONE managers, however, weren’t quite sure how they would take Monospace to market. KONE managers had to decide what segment of the market they were going to target, how they were going to penetrate this segment, and how they could quantify the overall economic value of their product to their potential customers.
Recommendations
The marketing strategy that we chose for KONE Aufzug was to advertise their product at trade shows, sales visits, and exhibitions such as Konstructor. We also chose to install fully functional Monospace elevators in all regional offices throughout Germany in order to demonstrate the potential benefits of this revolutionary new product first hand to our customers. Monospace elevators will come with a price guarantee between initial quotes to final delivery. This will alleviate any financial anxiety that our customers might have about dealing with a single supplier. Furthermore, we recommend that KONE set the price of the new Monospace elevator at DM 85,000 and increase their sales force, especially in regards to introducing new products, in order to compete with their competitors.
Analysis
KONE Monospace is a revolutionary machine-room-less elevator that yields significant advantages over other designs. The gain of additional usable space for revenue-generating purposes and the greater