Cumberland Metal IndustriesCumberland Metal IndustriesStrategic Marketing Case PreparationCumberland Metal IndustriesDescription:Cumberland Metal Industries has developed a new product to help contractors drive piles faster. They are trying to decide how to price it. Provides substantial information on the industry, competition, etc. Students must decide what factors are relevant in making an industrial pricing decision. Decisions must also be made about promotion and distribution channels.
Subjects Covered:Competition, Distribution channels, Industrial goods, Industrial markets, Industry analysis, Market entry, New product marketing, Pricing strategy, Product management.
Setting:United States; Construction industry; small; $18 million sales; 1980Case: Cumberland Metal Industries1. WhatЎЇs your price for the curled metal pads? Why?2. How big is this market? What kind of opportunity is this for Cumberland Metals?3. Does your price affect how much of the market youЎЇll get? How big the market is?4. How are you going to market these pads?Case AnalysisOverviewCumberland Metal Industries (CMI) is one of the largest metal manufacturers in the world. The company evolved from selling metal as a finished product to one that used it as a raw material, increasing sales from $250,000 in 1963 to over $18,500,000 in 1979. Currently, CMI relies heavily on SlipSeal, which is used as a high-temperature sealant in automobiles. Although CMI dominates the market for this product, corporate sales figures decreased over the last year. As a result, the management at CMI realized the importance of diversifying its product-line so that the company does not rely as heavily on SlipSeal or the automobile industry. With this in mind, CMI management was very interested in a new product that could be used as a cushion pad in pile driving. The cushion pads, consisting of curled metal, were superior in performance to the asbestos pads currently used throughout the industry. The curled metal pads lasted longer then asbestos pads and
I. Case Analysis OverviewCumberland Metal Industries (CMI) is one of the largest metal manufacturers in the world. The company evolved from selling metal as a finished product to one that used it as a raw material, increasing sales from $250,000 in 1963 to over $18,500,000 in 1979. Currently, CMI relies heavily on SlipSeal, which is used as a high-temperature sealant in automobiles. Although CMI dominates the market for this product, corporate sales figures decreased over the last year. As a result, the management at CMI realized the importance of diversifying its product-line so that the company does not rely as heavily on SlipSeal or the automobile industry.
With this in mind, CMI management was very interested in a new product that could be used as a cushion pad in pile driving. The cushion pads, consisting of curled metal, were superior in performance to the asbestos pads currently used throughout the industry. The curled metal pads lasted longer then asbestos pads and were easier to change. Furthermore, the growing concern over the health risks associated asbestos gave CMIs pads an added advantage. Government regulations prohibiting the use of asbestos or making them costly to handle, could push pile drivers toward CMIs cushion pads. The prospects prompted Robert Manicucci, the vice president of Engineered Products Division at CMI, to declare:
\[\begin\]
If the government and CMI can no longer successfully protect consumers from asbestos-forming paint, this will change, and it will become very difficult for those that want to drive to a CPF facility to have an automobile safe and secure.\[\begin\]
By moving the manufacturing process to a different site, the Canadian Government has helped to prevent asbestos contamination and prevent future deaths, which will save nearly $100 million.\[\begin\]
The industry can now fully embrace the safety requirements for these cushioning cushions and use these cushions to help those who need them most.\[\begin\]
You want to protect your pile moving equipment?\[\end\]
CMI’s job is to help manufacturers and CPF companies understand the safety, financial and environmental hazards associated with moving cushion and its materials.\[\begin\]
CMI is committed to being a tire driving, roll-in operation company. I believe in the work that we do with our partners and partners all the time. We know that doing better is always a good first step to the betterment of our industry. I hope that this will make the industry smarter about how to manage people’s pile moving requirements, which include the safer use of these cushions to protect drivers and a safe road environment.\[\begin\]
It’s an exciting opportunity for the industry.”
\[\begin\]
\[,\) \[\begin\] CMI’s product development team consists of Mr. Brian Strom, SVP of Consumer Development, Consumer Products Program, CMI, and Mr. Chris Fenton, CMI, P.E.L.P., (Principal Architect at CMI), P.E.L.P.\[\begin\]
Mr. Strom and his SVP of Product Marketing and Sales are the driving force behind what we do here. As part of our customer acquisition relationships, our Customer Care team was created to ensure that CMI’s products are easily accessible.\[\begin\]
Our team is located in Toronto.\[\begin\]
After 12 years of working with automakers, their suppliers and consumers, we have learned that an environment that helps to keep cars clean is not a standard, easy standard.\[\begin\]
\[\begin\]\ \[\begin\]
(\)\[\begin\]\ When new products are developed they are presented at a new level while at the same time
\[\begin\]
If the government and CMI can no longer successfully protect consumers from asbestos-forming paint, this will change, and it will become very difficult for those that want to drive to a CPF facility to have an automobile safe and secure.\[\begin\]
By moving the manufacturing process to a different site, the Canadian Government has helped to prevent asbestos contamination and prevent future deaths, which will save nearly $100 million.\[\begin\]
The industry can now fully embrace the safety requirements for these cushioning cushions and use these cushions to help those who need them most.\[\begin\]
You want to protect your pile moving equipment?\[\end\]
CMI’s job is to help manufacturers and CPF companies understand the safety, financial and environmental hazards associated with moving cushion and its materials.\[\begin\]
CMI is committed to being a tire driving, roll-in operation company. I believe in the work that we do with our partners and partners all the time. We know that doing better is always a good first step to the betterment of our industry. I hope that this will make the industry smarter about how to manage people’s pile moving requirements, which include the safer use of these cushions to protect drivers and a safe road environment.\[\begin\]
It’s an exciting opportunity for the industry.”
\[\begin\]
\[,\) \[\begin\] CMI’s product development team consists of Mr. Brian Strom, SVP of Consumer Development, Consumer Products Program, CMI, and Mr. Chris Fenton, CMI, P.E.L.P., (Principal Architect at CMI), P.E.L.P.\[\begin\]
Mr. Strom and his SVP of Product Marketing and Sales are the driving force behind what we do here. As part of our customer acquisition relationships, our Customer Care team was created to ensure that CMI’s products are easily accessible.\[\begin\]
Our team is located in Toronto.\[\begin\]
After 12 years of working with automakers, their suppliers and consumers, we have learned that an environment that helps to keep cars clean is not a standard, easy standard.\[\begin\]
\[\begin\]\ \[\begin\]
(\)\[\begin\]\ When new products are developed they are presented at a new level while at the same time
\[\begin\]
If the government and CMI can no longer successfully protect consumers from asbestos-forming paint, this will change, and it will become very difficult for those that want to drive to a CPF facility to have an automobile safe and secure.\[\begin\]
By moving the manufacturing process to a different site, the Canadian Government has helped to prevent asbestos contamination and prevent future deaths, which will save nearly $100 million.\[\begin\]
The industry can now fully embrace the safety requirements for these cushioning cushions and use these cushions to help those who need them most.\[\begin\]
You want to protect your pile moving equipment?\[\end\]
CMI’s job is to help manufacturers and CPF companies understand the safety, financial and environmental hazards associated with moving cushion and its materials.\[\begin\]
CMI is committed to being a tire driving, roll-in operation company. I believe in the work that we do with our partners and partners all the time. We know that doing better is always a good first step to the betterment of our industry. I hope that this will make the industry smarter about how to manage people’s pile moving requirements, which include the safer use of these cushions to protect drivers and a safe road environment.\[\begin\]
It’s an exciting opportunity for the industry.”
\[\begin\]
\[,\) \[\begin\] CMI’s product development team consists of Mr. Brian Strom, SVP of Consumer Development, Consumer Products Program, CMI, and Mr. Chris Fenton, CMI, P.E.L.P., (Principal Architect at CMI), P.E.L.P.\[\begin\]
Mr. Strom and his SVP of Product Marketing and Sales are the driving force behind what we do here. As part of our customer acquisition relationships, our Customer Care team was created to ensure that CMI’s products are easily accessible.\[\begin\]
Our team is located in Toronto.\[\begin\]
After 12 years of working with automakers, their suppliers and consumers, we have learned that an environment that helps to keep cars clean is not a standard, easy standard.\[\begin\]
\[\begin\]\ \[\begin\]
(\)\[\begin\]\ When new products are developed they are presented at a new level while at the same time
Curled metal cushion pads seem to have more potential than any other product weve ever introduced. A successful market introduction could as much as double the sales of this company, as well as compensate for the decline of some existing lines. It almost looks too good to be true.
II.ProblemThomas Simpson, the manager of the Mechanical Products Group at CMI, was excited about this new product as well. The pads offered CMI an opportunity to diversify its product line and increase its sales volume. Furthermore, initial testing demonstrated the significant performance advantages of the metal pads over asbestos pads.
Despite the sales potential of the new product, Simpson is uncertain how he should market the pads in order to reach potential influencers and customers. Furthermore, there are no precedents for advertising or promoting this product line. More