2. INDUSTRY INFORMATION $2 Billion Market PALLADIUM DOOR
3. INDUSTRY INFORMATION Low brand name awareness Friends, relatives, and neighbors – principal source of information when Steel garage doors preferred over wood – 9 to 1 15% of buyers would install their own garage door
7. INDUSTRY INFORMATION COMPETITION Clopay Corporation (sales of $400+ M) Overhead Door Corporation Wayne Dalton Corporation Amarr Garage Doors Roynor Garage Doors 7
25. Market Overview Brand A average sales $69,600 Brand B average sales $34,800 Brand C average sales $11,600 Palladium has 2.6% of a market that has total sales of $348.5 million; 3002 independent garage dealers $ 116,089 average sales/dealer 20 dealers on each market (3002/150) Exclusive dealers have sales above the market $128,000 vs. $116.089 Nonexclusive dealers have sales of $9200; makes Palladium = Brand C
27. Feasible solution 1Status Quo Non exclusive (300 dealers) Exclusive (50 dealers) Has strong potential to increase sales 30%*9.2mil/300= $9200 sales per dealer Make Palladium the third brand status for nonexclusive distribution Has little potential for sale increase 70%*9.2 mil/50= $128,000 sales per dealer Market has an average of $116,089/dealer
28. Status Quo (continued) Nonexclusive current sales are 9200 per year; In order to reach 12.5 million in sales the nonexclusive market should increase from $9,200 to $19,684 Market growth is only 2.5% Incremental volume due to advertisement may not match required growth
29. Feasible solution 2Increase dealerships Market projected sales 2004 9.2 mil * 1.024= $9,420,850 Difference of sales that needs to be covered by added dealers 12.5 mil- 9,420,850 = 3,079,150 They need to achieve 2nd brand status
30. Feasible solution 3Reduce dealerships Hard to achieve the sale objective Exclusive dealers sales in 2004 $6,594,550 (6450000*1.024) Shortfall in objective of 2004 (to be made up by nonexclusive dealers) 12.5 million – 6,594,550 = $5,905,450 Sales per dealer required to match objective 5,905,450/200 = $29,527 Required increase in sales effort to match objectives = 29,527 / 9,200 = 3.21 times current effort
33. Conclusion Formal Exclusive Franchise Program Adding 27 exclusive dealers Palladium will reach the sales goal of $12.5 million New advertising & promotional programs in 27 exclusive markets Monthly metrics for all markets
Editor's Notes
Local, regional, and national garage door manufacturers compose a $2 billion industry
Residential garage door brand awareness is very low, only 10% of prospective buyers could provide a brand name when askedWhen potential customers look for residential garage doors the primary sources of information are friends, relatives and neighbors, as well as previous experiences with service and installationSteel garage doors are preferred to wood garage doors by a 9 to 1 margin
When asked what criteria they would use in buying a new garage door, potential customers mentioned most frequently the price, quality, reliability of the installer and aesthetic appeal
Palladium door distributes its products trough 300 independent dealers that offer at least 3 different garage door manufacturer brands. Those dealers operate on 100 marketsAnd 50 exclusive dealers who sell Palladium brand exclusively and also service competing brands in their area of operation. Exclusive dealers operate a total of 50 markets.
The largest garage door manufacturer in the US is Clopay Corporation with sales of over $400 Million and sells its product trough large homecenters like Lowes and The Home Depot. Other large, national manufacturers are overhead…., ….. . Palladium Door is considered to be one of the smaller regional garage door manufacturers in the industry.
