Harvard Case Study - Sealed Air Corporation

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Topics: Marketing
1.0 INTRODUCTION The Sealed Air corporation is committed to market leadership through technological innovation. Ten years ago, the company was first to market with a highly successful coated air-bubble packaging protection product, AirCap. However, market trends indicate a rapid displacement of coated bubble by a technologically inferior yet inexpensive uncoated product. Burgeoning demand for uncoated bubble poses a direct threat to the long-term viability of the technologically superior, premium priced AirCap. Thus Sealed Air is situated at a critical standpoint. It can either continue to deal exclusively in the manufacture of high-end coated bubbles emphasizing performance over price, or segment the market by introducing an inferior, inexpensive uncoated bubble. To this end, this report will analyze the industry, competition, and company internal environment to assess the viability of targeting this low-end market segment. A strategic marketing plan for launching an uncoated product will follow.
2.1 Industry Analysis ---state growing market. The protective packaging industry can be segmented three ways by use: positioning, block, and bracing; flexible wraps; and void fill. Coated (e.g., AirCap) and uncoated air bubble products serve the flexible wrap and void fill markets (refer to Glossary). The flexible wrap market, which dwarfs void fill as measured by annual sales, is of primary concern to Sealed Air and will thus constitute the focus of this report. Protective packaging is sold to organizational customers through select distributor networks via personal selling. Sales commissions for AirCap are set at 2%. Often, manufacturers must have a regional presence to be successful in a given locale. Distributors aspire to be full-line houses—capable of meeting a customer's complete packaging needs. As a result, larger distributors typically carry competitive products. Margins on product resale is generally

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