Industrial Chemicals Inc.

1. Industrial Chemical Inc
Case Analysis
BBM, NMP Term III
Group 4
Argha Ray - 15
Chakra Dhar Kundu - 22
Khushal Malik - 28
Sanjay Kumar Prasad – 45

2. Context
• Industrial Chemical sells highly differentiated patent protected pigment WP-88.
• WP-88 has captured 80% market but sales are likely to flatten in 3 years
according to marketing department projections.
• Marketing manager Linda ardently advocates Product Augmentation through
Technical Application Service.
• R&D manager Hugh trying to protect his turf and focus on new discoveries.
• Sales Manager Terry wants to push sales through sales force increase.
• Both Terry and Hugh do not like the idea of technical application service

3. Follow Linda’s hunch:
Proposals:
• Offer in-depth technical service to customers of WP 88.
• Hire field Engineers who will collaborate with customers to develop new
applications of WP 88.
• Establish technical feedback mechanism through field Engineers.
• Market product to untapped small businesses.
Concerns:
• Field Engineers still not employed for WP 88 business. Poach from R&D or
hire?
• Heavy Investment involved in hiring Field Engineers to provide Tech
Service.
• Reporting Structure for Field Engineers.

4. Protect Hugh’s turf:
Proposals:
• Concentrate on new product development.
• Strengthen R&D on product development rather than Tech Service.
Concerns:
• Resource Crunch in R&D.
• Linda may poach R&D talent for Tech Service.
• Including customization in product may throw to many combinations. Too
much for R&D to handle!
• Issues may crop up with customers regarding Intellectual Property Rights.
• Concentrating R&D resource for field engineering may cause setback for
product development.

5. Terry’s Sales perspective:
Proposals:
• Increase sales force to push products.
• Tap European markets.
• Customer wants lower price than added service.
Concerns:
• Price pressure from customers on WP 88.
• Field Engineers may not be as competent as sales force to develop
customer relations.
• Investment in Tech service may prune profit margin.
• Reporting structure of Field Engineers.

6. Yardsticks:
• WP 88 is approaching maturity in product life cycle.
• WP 88 market is saturated with minimum growth opportunity.
• Customers buying through Purchasing Agents, which suggests that they are gradually
moving towards “Experienced Specialists” in the above graph.
• Customers, however, are still not comfortable with applications of WP 88.
• Technical collaboration and knowledge transfer may result in exploitation of hitherto
unknown possibilities with WP 88.
• Hugh’s R&D on new product is uncertain vis a vis a hit product like WP 88 which can
still be exploited.

7. Decision:
Customers
Inexperienced
Generalist
Experienced
Specialists
Product
Differentiation
High
WP 88
Customers
Augment
product ,
Applicat i
on
Support
Low
• Differentiate product by providing Tech Service, otherwise product will
move into commodity category.
• Milk WP 88 till it reaches decline stage in the product life cycle.

8. Decision Contd..
Account Manager
Field Engineer
•
•
•
•
Sales Force
Hire Field Engineers for Tech Service based on geographic region.
Strengthen Account Management practice with above reporting structure.
Market product to new novice customers.
Segregate R&D into Development Area and Implementation Support Area.
R&D
Product Development
Implementation Support