Commercializing Kunst 1600

Topics: Price, Marketing, Cost Pages: 4 (930 words) Published: December 1, 2008
Executive Summary
The Kunst 1600 is best suited for introduction into the light commercial refrigerator repair market. Its superior features, durability, and reliability provide the customer with nearly $1,000 value in use of over current competitor models. However, the Kunst 1600 is not well suited to the residential AC market due to the wide spread perception that a 1.6 CFM pump is not capable of handling repairs for comparatively larger air conditioning units. For the home refrigerator repair market, the benefits of using a Kunst 1600 are marginal, yielding a total value in use of approximately $120. To penetrate the light commercial refrigerator segment we need to increase Kunst brand recognition, educate wholesalers on the benefits of our product, and emphasize the significant cost savings to repair shop owners relative to competition through advertisements and personal visits.

Marketing Study Results
Points of Parity and Differentiation
After extensive study, we established the product points of parity to be the Kunst 1600’s size, weight, and performance (CFM). With regards to wholesalers, our company stability, product quality, and equivalent technical services are on par with competitors. Points of differentiation with competitors are longevity, increased durability (due to less moving parts and a solid aluminum frame), oil-free use, increased profit due to decreased pump time, the ability to detect leaks (the most common cause of refrigeration system failure), and greatly increased savings, for a total value in use of almost $1000 (Exhibit 4). Direct benefits to the wholesalers are increased profits relative to selling competitors’ products ($100 in profit if the Kunst 1600 is sold at MSRP). The Kunst 1600 provides various cost savings for each market segment studied (Table 1). Details on these calculations are shown in Exhibit 1.

Table 1. Kunst 1600 Cost Savings per Market Segment
|Market segment |Oil cost ($)...
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