A case study of LUMS, Pakistan. Detailed review with the recommendations at Bachelors level for the students.

1. United Foam Industries (PVT) Limited
Case Study Presentation
Strategic Marketing
Group Members
• Tayyab Ali Baig
• Sana ullah
• Abdul Jawad Khattak

2. United Foam Industries (PVT) Limited
Case Study Presentation
Important Points to remember;
• Change in production technology occurred over the
time causing lower production cost with 20% less
wastage.
• Cost of production was influenced by procurement
policies.
• External factors like Government policies also
impacted cost of foam manufacturing.

3. Competition
Increase in competition of foam industry in
Pakistan was caused by following factors.
• low entry cost
• Rapidly developing market
• Simple technology for production

4. Q1. Compare and contrast marketing strategies of
different players in foam industry
All the players in market got benefit from the change in
government policies for locating plants in tax free zones. This
gave the edge to the companies to spend more on their
advertisements and marketing.
Brands/
Factors
Master Diamond Mehran Al-khair United
Dealer
Margin
18% 20% 27% 30% 24%
Marketing
Budget
20M 10M No
advertisement
high 2M
Sales Force 30 55 12 - 2
Plant
Location
(Gadoon)
Yes Yes Yes Yes No

5. Q1. Compare and contrast marketing strategies of
different players in foam industry (cont.)
Difference in strategies can be understood with the following
Porter’s competitive strategy model.

6. Q1. Compare and contrast marketing strategies of
different players in foam industry (cont.)
All the players except United foam were using “ Cost Leadership
Strategy” as the market was price sensitive due to a large
target market being middle class and lower middle class.
United foam on the other side using “Differentiation strategy”,
was not able to fight against the following things.
• Higher margins to dealers
• Low promotional budgets
• High production prices

7. Problems faced by United Foam
United foam faced numerous long term and short term problems that
took it to a verge of dissatisfied dealers and continuous drop in its
sales volume.
In general the problems that are faced by united foam are as follows.
• Uncertainty
• Innovation
• Policy and regulation
• Technology
• Diversity
• Supply chains

8. Q2. what short term and long term problems are faced
by United Foam industries (Pvt) limited.
• Short Term Problems
1. Decrease in Sales
2. Frustrated Dealers
3. Low Prices by Competitors
4. Dealer Bad Debt
5. Consumer’s Preference

9. Q2. what short term and long term problems are faced
by United Foam industries (Pvt) limited (cont.)
• Long Term Problems
1. Production Cost and Facility
2. Technology Up-gradation
3. Brand Positioning and Image
4. Internal competence in Value Chain
5. Lack of Managerial and Financial Resources

10. Q3. As United’s Managing Director, What would you do
Being United’s MD, I would have taken following steps to tackle
the situation faced by the company.
1. Re-branding
2. Choosing a competitive advantage
3. Heavy Advertisement with Value Added Features
4. Raising Dealers Margin in Different Foam Quality
5. Raising IPO (going Public) – (Exit Strategy)

11. Q3. As United’s Managing Director, What would you do
(cont.)
• Re-branding.
Partial re-branding by changing logo, re-defining target audience
in advertisements, re-inventing tag lines.
• Choosing Competitive Strategy.
Just like competitors, instead of lowering quality
and price, introduce more products of lower
quality and lower price for price sensitive
target market. (Product Line Extension).

12. Q3. As United’s Managing Director, What would you do
(cont.)
• Heavy Advertisement with Value Added Features.
Advertisements with some value added features could get
customers attention by engaging dealers services and
essentially providing value to the dealer as well.

13. Q3. As United’s Managing Director, What would you do
(cont.)
• Raising Dealers Margin and Maintaining Relationship
As done by other players, the dealer’s margin are maximized
more on the low quality foam category.
Greater margin %ages on category C or D products will enable
dealers to push products to the market.

14. Q3. As United’s Managing Director, What would you do
(cont.)
• Raising IPO (Going Public)
For getting financial stability to operate more effectively in
market and survive, raising IPO is one of the best option.
Perks of raising IPO;
• Enough financing to develop new facility.
• Starting retail setup.
• Continuously raising capital for meeting dealer’s demand.