Sealed Air Vs. Gafcel
Essay title: Sealed Air Vs. Gafcel
2. SUMMARY
The protective packaging market is becoming more competitive.
Sealed Air company is encountering a growing number of competitors in its field. Similar or alternative systems are now proposed against those of Sealed Air. These new systems are often cheaper but as argued by Sealed Air less effective concerning the protection they offer and therefore less cost-effective.
A new company (GAFCEL) has entered the market with an uncoated product and is having success on the New York, California and Ohio market. Sealed Air will face further erosion of its US market share.
Based on the analysis of the AirCap® product as well as on the analysis of the market, we will answer questions regarding Sealed Airs reaction to its new competitor GAFCELL and the opportunity to introduce a new uncoated product in the market.
We will make marketing recommendations on how to introduce this new product and in which geographical market to launch it in order to maintain Sealed Air as a leader of the protective packaging market.
3. QUESTIONS
3.1. What should Sealed Air be trying to accomplish in any decision it makes in response to the GAFCEL threat?
It should be trying to gain back the market share that was taken by GAFCEL and it should ensure it does not loose anymore market share.
It should ensure it keeps its reputation of a company built on ‘technical accomplishments’ and must ensure its image does not suffer from the possible introduction of this new uncoated product.
It should not ‘cannibalise’ itself and therefore it should ensure the products are segmented correctly.
3.2 What has been happening in the market and how is Sealed Air doing?
In order to answer this double question, we have completed and focused our analysis mainly on the AirCap product manufactured by Sealed Air.
3.2.1 Strengths and Weaknesses
STRENGTHS
WEAKNESSES
PRODUCT
quality & reliability
benefit to customers
barrier coating with saran
8 different grades to fit all applications
patent protection
registered trade mark
only coated products offered in the USA
PRICE
10[%] margin to distributors for direct sales
quantity discount
higher than competitors, up to 50[%] (England)
COMMUNICATION
promotional brochure
competitive product information
price lists
direct communication to end customer
DISTRIBUTION
7 regional manufacturing operations in USA
manufacturing facilities in Canada
licensed manufacturing facilities in Australia, Mexico, South Africa and Spain
sales organization in Japan
manufacturing operations in Europe
62 salespeople
370 distributors
licence to ASTRO
distribution policy and loyalty from distributors
60[%] of time of salespeople to Instapak
35[%] of time of salespeople to AirCap
distributors offer competitive products
SERVICE
packaging labs
strong support to distributors
best trained salespeople in market
Conclusion :
Between 1971 and 1980 Sealed Air and Astro were the only producers of air bubble packaging in the USA. With its patented coated product AirCap®, technologically more advanced than its competitor, Sealed Air is the leader of the market.
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