If Sealed Air was to put uncoated bubble products into production, the sales might not be very satisfying because of the already crowded market of uncoated bubble products. The competition is fierce, and the many the consumers cannot tell the differences on quality, nor do they actually do the cost-savings mathematics. Price is their priority, so if Sealed Air’s uncoated bubble products are not cheaper than its competitors’, then entering this market would be a waste of money and human resources. Not to mention that the marketing cost for the new product line is obviously not going to be a small sum if they want to beat the competitors. On the other hand Sealed Air cannot lessen the effort on marketing for the coated bubble products, because they would have to explain to the public why they should buy the expensive products if Sealed Air’s less expensive uncoated bubble products are as good as advertised.
If Sealed Air doesn’t enter the uncoated bubble product market, and instead use the money on research to find some way to reduce the cost of their coated products and foam-in-place packaging and other products, this can also be a way of increasing sales and raising profits.
A leading company does not have to be present in every product category to ensure their revenues. According to given data, the biggest segment in the US protective packaging market is positioning, blocking, and bracing, and air cellular packaging is mostly used for flexible wrap and void fill. Sealed Air’s foam-in-place packaging is the fasted growing contributor to the company’s net sales, it is necessary to take into account whether the money used to develop their uncoated bubble product line will be able to generate more profit than if it was used to strengthen the company’s existing product lines.
The US consumers value the cost-saving effect of packaging products...