Paper Products Inc.: Case Study
Case 1
Paper products, Inc.
Introduction
Paper Products Inc., a manufacturer of file folders, file markers and labels, and a variety of indexing systems, the products of PPI are of great quality and have no match with the competitors.
The case basically revolves around a decision that is to be taken on a proposition offered by Office Center Inc. – a distributor of office supplies i.e. offering PPI to get into Dealer Branding, creating a product under dealers brand name similar to that of its flagship product named FILEX. So Diane Chin, Marketing manager of PPI is in dilemma whether to accept/reject the offering.
Facts
1. PPI’s primary products are File folders, File markers and Labels. 2. PPI’s FILEX brand has over 60% of the market. 3. PPi has been in business 28 years and now has a sales volume of $40 million, out of which Filex brand accounts for about 35% of this volume. 4. PPI’s Distribution system consists of 10 regional stationary suppliers (40% of Total Sales), Office Center Inc. (30% of Total Sales – major customer), more than 40 local stationers. 5. PPI’s Policy at stake Most of PPI’s money has been devoted to new product development rather than promotion of existing brands.
Issues or Problems: 1) Dealer Branding : This is a case of dealer branding wherein Office Centre is offering PPI to produce a new line of product similar to FILEX under its own name and this is hindering FILEX’s own brand image. 2) PPI’s corporate policy gets hindered if the proposal is accepted, the policy states : a) To avoid excessive dependence on any one customer and b) To sell its own brands so that it success is dependent on the quality of its products rather than just a low price. 3) Diane is also concerned that if Office Center brands its own file folders it will sell them at a discount and may even bring the whole market price level down which is already averaging a 20 percent gross margin and cutting this margin further does
Paper products, Inc.
Introduction
Paper Products Inc., a manufacturer of file folders, file markers and labels, and a variety of indexing systems, the products of PPI are of great quality and have no match with the competitors.
The case basically revolves around a decision that is to be taken on a proposition offered by Office Center Inc. – a distributor of office supplies i.e. offering PPI to get into Dealer Branding, creating a product under dealers brand name similar to that of its flagship product named FILEX. So Diane Chin, Marketing manager of PPI is in dilemma whether to accept/reject the offering.
Facts
1. PPI’s primary products are File folders, File markers and Labels. 2. PPI’s FILEX brand has over 60% of the market. 3. PPi has been in business 28 years and now has a sales volume of $40 million, out of which Filex brand accounts for about 35% of this volume. 4. PPI’s Distribution system consists of 10 regional stationary suppliers (40% of Total Sales), Office Center Inc. (30% of Total Sales – major customer), more than 40 local stationers. 5. PPI’s Policy at stake Most of PPI’s money has been devoted to new product development rather than promotion of existing brands.
Issues or Problems: 1) Dealer Branding : This is a case of dealer branding wherein Office Centre is offering PPI to produce a new line of product similar to FILEX under its own name and this is hindering FILEX’s own brand image. 2) PPI’s corporate policy gets hindered if the proposal is accepted, the policy states : a) To avoid excessive dependence on any one customer and b) To sell its own brands so that it success is dependent on the quality of its products rather than just a low price. 3) Diane is also concerned that if Office Center brands its own file folders it will sell them at a discount and may even bring the whole market price level down which is already averaging a 20 percent gross margin and cutting this margin further does