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My recommendation of marketing strategy for launch the MonoSpaceЮ in Germany is using low price to gain market share. This suggestion is based on the following reasons:
First, the Germany market is shrinking. The expect market of Germany in year 2000 is 4000 renovating unit (26% of 15,500 unit in 1995) and 13,000 new unit. (85% of 15,500 unit in1995) Since С? of the expected market will be renovating projects, which cannot utilize the most significant strength of MonoSpaceЮ (No machine room) I suggest we split the marketing strategy of MonoSpaceЮ into two parts: renovation market and new equipment market.
For renovation market, property developer, who primly concerned with the overall cost, will be the focus customers. We will emphasis the long-term cost saving for replacing an old elevator to a MonoSpaceЮ, such as better energy saving benefit and lower maintain cost. For new equipment market, we will focus on architects, because most small contractors rely on architects to select elevators. Thus, property developers, general constructors, and architects will be our target customers.
Second, mid-size player and “cowboys” count for a 35.5% German elevator market share. They are our main competitors in Germany market. Since the end of construction boom brought price competitions, which effectively squeezed the space for mid-size or small players, we should price the MonoSpaceЮ at a low price in order to gain market share from those mid-size or small players. My suggested pricing police for MonoSpaceЮ are to set the price of MonoSpaceЮ as low as a hydraulic system, which accounted for approximately 60% of the German low-rise elevator market. Although, it is foreseeable that the inevitable erosion of current product line by the launch of MonoSpaceЮ, the overall market share of KONE will increase.
Third, learning from Netherlands experience,