Capstone Case Study Summary

KONE is an elevator company with a new and innovative product to entering the market. This company is faced with the problem of what they want to charge and how they are going to position this newest product without cannibalizing their existing product lines. Another problem the company faces is how and to whom they should market this new elevator application. The company can rule out marketing to the high rise gearless traction market because their technology doesn?¦t apply to this market, as of now. Although they are not able to market to this group the benefits of gearless traction can be used in comparison to the geared and hydraulic elevator systems. One problem that was learned from the preliminary markets was that customers worried that KONE would be able to price gauge them since they were the only ones with this sort of technology.
The existing products offer the customer a number of options. Depending on who is making the buying decision they can base the purchase on up-front costs, lifetime savings, or quality of the equipment.
Strengths:
?h No machine room that creates greater architectural freedom and more usable revenue-generating space
?h Compare to gearless technology:
They could market it in-between the hydraulic and the geared traction or they could position it as top of the line. If they were to position the ecodisc just above the hydraulic elevator the customer would receive all the benefits listed. I think that they should keep the hydraulic as their low-end model. The reasoning behind this is that why give the customer all the added benefits of the ecodisc for a low-end price. If the product is to be positioned at this level I believe that they would cannibalize their existing geared traction line. Why wouldn?¦t a customer upgrade to the ecodisc from the hydraulic? They would stand to gain the most value of the purchase. This would only be defeating the purpose of the new