Xiameter Case Study

Topics: Marketing, Dow Corning, Pricing Pages: 10 (2384 words) Published: August 23, 2013
Executive Summary

Silicon and silicon-based materials can be formulated to deliver unlimited range of uses. Silicon is durable enough for long lasting uses in the construction industry, yet can be gentle enough for uses in the healthcare and medical devices. Dow Corning has been pioneers in the development of silicones for commercial uses for the last 80 years, founded as a joint venture between Dow Chemical Company and Corning Glass. They became a global leader in manufacturers of silicon-based products with a 40% worldwide market share. Dow Corning was a pioneer producing fit for purpose market leading products.

Around late 1990 Dow Corning encountered major performance and financial losses, customers were defecting to low-priced suppliers which eroded Dow Corning’s volumes and margins. In 2001 after another dismal year and Dow corning not living up to its capabilities and layoffs proved inadequate, a fresh start was required. After numerous strategic deliberations Dow Corning decided on a dual brand strategy going forward, resulting in a ‘new’ business unit Xiameter ‘a disruptive innovation’ being formed.

Xiameter first mover advantage was starting to erode according to some pessimists, we need review current marketing plan, and chart a future for the business.

Introduction

The purpose of this report is to investigate decisions that shaped the business model and marketing strategy, interrogate the segmentation, discuss the product, pricing and competitive environment and possibly make recommendations to maintain the current market share Xaimeter is enjoying. Xiameter’s present model was centered on high priced advanced products with high quality service offerings.

Customers Analysis

Customers are spread worldwide in more than 80 countries within 6 concentrated industries, serving 25 000 customers with more than 7 500 products. Industries include from healthcare to automobiles and household products to electronics. (Xiameter Case Study)

Customer paid premium prices for the innovative high quality product that included value add services like customized application testing, training custom blending packaging and recycling. Customer had long term relationships based on making Dow Corning interest the customer’s interest.(Xiameter Case Study)

During the initial years Dow Corning was very profitable and they enjoyed double digit growth on unique products. In the late 1990’s their healthy business performance came to an abrupt end. The main contributor was Dow Cornings’ marketing strategies have not change with the market (Xiameter Case Study).

Marketing Environment

The marketing environment comprises the microenvironment as well as the macro environment. Actors on the microenvironment affect the market directly, while actors on the macro environment affect the marketing environment indirectly. The factors and decisions that shape the business model and strategy is depict in the microenvironment Political

In all chemical manufacturing environments there are the challenges of environmental regulations as specified by the authorities, Dow Corning was no exception. Rising demand for “Green” projects, Dow Corning participate in the Responsible Care Program of the American Chemist Council (ACC) Economic

Global leader in silicone based product with a 40% worldwide market share, with its closest rival with only 26% market share. Dow Corning achieved double digit growth in its initial years. Social
All manufacturing, development and testing is conducted ethical and ecological friendly environment, as they are suppliers of silicone products within the healthcare industry Technological
Dow Corning is innovative and produces high quality products supported by the company’s strong service offering. This include customize application testing, training custom blending packaging and recycling and formulation. They earned the reputation as the world’s inventive supplier of silicone products...
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