Kone Mkting Plan

Topics: Elevator, Otis Elevator Company, Elevators Pages: 4 (1163 words) Published: February 10, 2013
KONE Marketing Plan

Industry Analysis:
The elevator industry is dominated by five companies namely Otis($5.3B) of United states, Schindler($4.0B) of Switzerland, KONE($2.2B) of Finland, Mitsubishi Electric($1.8B) of Japan and Thyssen($1.5B) of Germany. Although KONE was the third largest elevator company, it was far smaller than the market leaders, who generated twice the revenue. Toshiba and Hitachi of Japan and Goldstar of Korea were other competitors in Asian market. At this time, revenue in the elevator business was generated by a two part pricing system: new equipment ($9B) and service ($13B). All the large players sold equipment as well as provided post installation service. The volume and type of elevators sold largely depended on factors such as urbanization, population density, and government support of public housing. Choice of elevator technology depended on various factors such as travel height, speed, comfort, machine room requirements, drive systems, controls, cabin size, interior finishing and price. The number of people involved in making the purchasing decision for an elevator varied greatly based on the size and cost of the building (complex DMU/DMP). Even for the same type of building, the importance of features differed based on the specific decision maker. For a low rise property, decision makers could include the property owner, a construction company manager, an architect, a construction company purchasing agent, or a building service manager. While owners/developers typically cared more about the upfront costs for an elevator, owners/landlords cared about the lifetime costs for an elevator but did not care much about comfort and aesthetics A lack of innovation in product development had resulted in commoditization of the market. Competition in the elevators industry was so fierce that the largest competitors ended up selling elevators at cost or below cost. By tacit agreement, elevator companies maintained high margins on annual...
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