This document discusses MNZ, a German engineering firm that manufactures and sells rubber-steel gaskets, metal expansion joints, and other products. It is looking to enter the Indian market. The document provides an overview of the global and Indian gasket industries. It then discusses MNZ's products and strategy for entering the Indian market, including product positioning, forecasting demand, determining pricing to achieve profitability targets, and proposing a product mix and pricing strategy. Recommendations include bundling gasket and expansion joint sales, long-term contracts, and participation in industry events.
2. Gasket Industry : Overview
Gasket – A flexible seal used to
prevent leakages from joints
Basic types - non-metallic, semi-
metallic, metallic
Utilization – Oil & Gas, Refineries,
Power Generation, Chemical Units,
Industrial Machinery & Automobiles.
Gasket industry is a $30 billion
industry with a CAGR
of 5.5% globally.
Fig : Rubber – steel gasket
Fig : Gasket between flanges
3. MNZ India : Overview
German based engineering firm
Manufacturing and selling Rubber Steel Gasket, Metal expansion joint, PTFE expansion joint, piping gasket etc.
MNZ Started to enter Indian Market and in India operates from Mumbai
Would like to enter the market of rubber steel gasket and metal expansion joints
MNZ produces high quality gaskets at relatively high cost
India is using sheet gaskets which are non-reusable and cheaper
MNZ's rubber steel gaskets are reusable
MNZ's metal expansion joint is high end-product and quality is the order winning attribute
4. Current Gasket
Market SIze $9
Billion
Projected
Industrial Gasket
Market size $11.6
Billion by 2025 -
CAGR 6%
Robust Growth in
refineries in recent
years
Forecasting of overall Gasket Industry
5. Collaboration between the design team & supplier is needed
The material selected affects gasket durability
Pay attention to industries’ specific specification & Materials composition of gasket for different operation
The shape of the gasket is determined by the shape of the surrounding mechanical components
Variables such as material thickness are also important
Key consideration for Gasket selection
Selecting the Right Gasket for Your Application
Choosing the best gasket for your project requires a close collaboration between your design team and your supplier. The materials is among the most important considerations, as it will determine the gasket’s
durability under your specific operating conditions. Some industries must also contend with specific regulations, such as those dictating appropriate food-grade rubbers. The shape of the gasket is slightly more
straightforward and is determined by the shape of the surrounding mechanical components. Of course, variables such as material thickness are also important and should be considered in collaboration with the
supplier’s engineering team.
6. Product Positioning Strategy (Ansoff Matrix)
Market Penetration (Selling more of the same to the
same types of people)
• Marketing through branding "German technology."
• Get the industry's best quality & reliability compared to
the Indian market
Product Development(Selling new products to existing
consumer)
•Since the company has R&D in Germany, hence it needs
to develop products economical in accordance with the
Indian industry
Diversification Strategy(Selling new products to n ew
consumer)
•They have a large number of product verticals, but in the
Indian market, the products are not listed in different
sectors; Hence they should be launching those products
with existing ones.
A few industries' names are as given below.
Piping, Steel, Automobile etc.
Market Development(Selling existing products to new
types of consumer)
•Entry into new industries in India (e.g. - oil & gas,
automobile, chemical, power generation, plumbing, steel &
refractory industries etc.
• Selling it via Omni channel & B2B commerce platform.
9. Selling Price of Rubber Steel Gasket
for an ROA of 20%
Total Assets – 25000/-
10. Selling Price of Metal Expansion
Joint for an ROA of 15%
Total Assets – 121000/-
11. Proposed Product Mix
Particulars
Present Avg.
Cost Price
Req. Profit to
achieve ROA
of 20% & 15%
Required
Avg. Selling
Price to
achieve ROA
Suggested Avg.
Selling Price
Suggested
Product Mix
Rubber Steel
Gasket
₹ 17 88% ₹ 32 ₹23 - ₹25 (35% - 47%) 60-70%
Metal Expansion
Joint
₹ 18400 2.40% ₹ 18836 ₹19500 - ₹20500 (6%
- 11%)
30-40%
• For ROA of 20% in Rubber Steel gasket, the profit required is 88%
• For market penetration, MNZ must reduce the profit margin or manufacturing cost of rubber steel gasket
• For ROA of 15% in Metal Expansion joint, a narrow profit margin of 2.37% is required
• Metal expansion joints is MNZ's high-end product and thus we can increase the profit margin
• This will balance MNZ's overall ROA from steel rubber gaskets and metal expansion joints
Overall ROA based on the proposed selling price – 47%
12. Rational behind Pricing & Product Mix
RUBBER STEEL GASKET
1. Pricing is done as per the current market selling price since
MNZ is willing to enter into the gasket market and it’s also a
low-end product
2. Demand for this product is quite high since its consumption is
very high in the market (used in a wide variety of industries)
3. Considering the demand we are suggesting a product mix of
60% - 70% as economies of scale can be achieved
METAL EXPANSION JOINT
1. Customization can be done as per specific requirements
2. Cost of breakdown could be significantly high if the low-quality
product is used
3. Metal expansion joints are used in critical locations to absorb
thermal expansion and terminal movement, and if the metal
expansion joints fail, then the subsequent effect could be
substantial financial loss due to plant shutdown
4. Targeting OEMs for whom the quality of the product is essential
for their customers, and they are ready to pay a premium for a
good quality product
5. Cost of metal expansion joint is insignificant for their users as
compared with the consequences in terms of financial loss due to
its failure
13. Suggested strategies for MNZ's
expansion in India
1. Offer steel gaskets at a "Special Price" to customers who buy metal expansion joints.
2. Proposed long-term contracts with clients such as ARC (Annual Rate Contract)
3. Active participation in industrial fairs and exhibitions pan-India