Sealed Air has been the market leader in the coated bubble product segment. It is considering introducing uncoated bubble product lines as it is gaining acceptance as a cheap alternative to the coated bubble product. Sealed Air may not be able to maintain and improve the current market share just by offering the uncoated bubble product. Instead, Sealed Air needs to introduce new uncoated bubble products at competitive prices to maintain yearly sales growth and market share.
Sealed Air has three possible alternatives to consider. The first option is to launch the uncoated bubble product line and price it competitively to attract customers. The second option is to not launch the uncoated bubble product and aggressively market the coated bubble products. The third and final option is to invest in R&D efforts to introduce new products that can be priced competitively with uncoated bubble products that are better in quality in comparison with uncoated bubble products. Alternative 1: Launch the uncoated bubble product line with lowest pricing strategy Sealed Air can try to get rid of the competitors by grabbing the uncoated bubble market completely. They could do this by not only launching the uncoated bubble product but also pricing it competitively. Pros:
Attract many cost conscious customers and ultimately improve Sealed Air's market share. ·
Increase the customer base for new product introduction in the future. ·
Decrease revenue in the short run on uncoated bubble product that can be compensated by the high profit margin coated bubbles.
Sealed Air has the risk of losing its coated bubble product consumers who might shift more towards the low profit margin uncoated bubble product. ·
Customers may be confused with this new line as Sealed Air has been touting the "barrier-coating". ·
Sealed Air's products may be considered to be just like any other low-cost supplier. ·
Profit margins may be lower than previous...
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