Case Study #2

Problem Statement Canty® International has been contacted with a request for a proposal for a contract installing wall panels for a hotel chain called Bryant Inns. They now have to find a price for the product that will covers their variable and fixed costs, appeals to the customer in a value pricing system, and allows Canty® International to make a profit at the same time. In this case study, we will be focusing on profit and sales orientation in order to find a price that will satisfy both the customer and the distributor. Key Findings Bryant Hotels are currently not satisfied with the short service life of their current wall coverings. Canty® International has a product development group called Design Lab that has created a product called Decoline. Decoline is able to last ten years, compared to the original product that lasts only two. Decoline can be produced in a wide variety of colors, textures and designs. It also meets Bryant Hotel’s standards by being specially treated for fire resistance and able to filter sound quite effectively. We have determined that the break-even point of selling this product would be $24.75 per meter squared. This price is set for equipment, supplies and labour to produce Decoline. Fixed costs and variable costs have been included in this, but we have not included the installation costs which estimated at $5.40 per meter squared. Decoline Costs and Expenses Fixed CostsPrice ($)Variable CostsPrice ($) per m2Supervision1080.00Material Fibre7.28Inspection165.00Bamboo Backing3.30Indirect Labour84.00Cement.80Floor Space Expense327.00Labour Costs1.31Tools30.00Building Tables X 34650.00Cutting Table480.00 Note: Fixed Costs have been broken down to a price for every square meter per month and do not include installation SWOT Analysis ,[object Object],Competitive Analysis Canty® International is involved in a monopolistic competition in regards to getting a strong hold in the wall covering industry. Their competitors are a step behind when it comes to long term life value of their product. The competitor’s wall coverings only last two years, and because of the efficient source of supply, Design Lab of Canty® International can create wall coverings at minimum costs that are comparable to other manufacturers. With this new advancement of wall coverings, Canty® International is going to take the lead in this market. Knowing that Canty® is able to make a better wall covering for a cheaper cost will cause the competitors to either drop their prices for their current product, or develop a wall covering that is just as effective, and sell it at a lower rate then Canty® International. If this is the case, competitors will step up efforts to sell a product at the same level, and the wall covering industry will engage in a price war. Target Market Canty® International’s target market is the commercial industry. They are establishing themselves as a key player in the hospitality segment, and are interested in doing long term contracts rather then short ones. Canty® is attempting to appeal to Canadian markets, and will be targeting large contracts by showing price alternatives based on the amount a customer purchases. By having a stronger product then competitors, and a comparable price, Canty® will use a concentrated segmentation strategy to develop a reputation as a leader in supplying wall coverings to the hospitality segment of the commercial industry.

Case Study #2

Recommended

Recommended

More Related Content

Recently uploaded

Recently uploaded (20)

Featured

Featured (20)

Case Study #2