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BASIC MARKETING 18th Edition by Jerome McCarthy William Perreault, Joseph Cannon
Edition 18ISBN: 978-0077577193BASIC MARKETING 18th Edition by Jerome McCarthy William Perreault, Joseph Cannon
Edition 18ISBN: 978-0077577193 Exercise 36
ApplPoly Products
Abby Preston, a chemist in ApplPoly Products' resins laboratory, is trying to decide how hard to fight for the new product she has developed. Preston's job is to find new, more profitable applications for the company's present resin products-and her current efforts are running into unexpected problems.
During the last four years, Preston has been under heavy pressure from her managers to come up with an idea that will open up new markets for the company's foamed polystyrene.
Two years ago, Preston developed the "foamed-dome concept"-a method of using foamed polystyrene to make dome-shaped roofs and other structures. She described the procedure for making domes as follows: The construction of a foamed dome involves the use of a specially designed machine that bends, places, and bonds pieces of plastic foam together into a predetermined dome shape. In forming a dome, the machine head is mounted on a boom, which swings around a pivot like the hands of a clock, laying and bonding layer upon layer of foam board in a rising spherical form.
According to Preston, polystyrene foamed boards have several advantages:
1. Foam board is stiff-but can be formed or bonded to itself by heat alone.
2. Foam board is extremely lightweight and easy to handle. It has good structural rigidity.
3. Foam board has excellent and permanent insulating characteristics. (In fact, the major use for foam board is as an insulator.)
4. Foam board provides an excellent base on which to apply a variety of surface finishes, such as a readily available concrete-based stucco that is durable and inexpensive.
Using her good selling abilities, Preston easily convinced her managers that her idea had potential.
According to a preliminary study by the marketing research department, the following were areas of construction that could be served by the domes:
1. Bulk storage.
2. Cold storage.
3. Educational construction.
4. Covers for industrial tanks.
5. Light commercial construction.
6. Planetariums.
7. Recreational construction (such as a golf-course starter house).
The marketing research study focused on uses for existing dome structures. Most of the existing domes are made of cement-based materials. The study showed that large savings would result from using foam boards, due to the reduction of construction time.
Because of the new technology involved, the company decided to do its own contracting (at least for the first four to five years). Preston thought this was necessary to make sure that no mistakes were made by inexperienced contractor crews. (For example, if not applied properly, the plastic may burn.)
After building a few domes in the United States to demonstrate the concept, Preston contacted some leading U.S. architects. Reactions were as follows:
"It's very interesting, but we're not sure the fire marshal of Chicago would ever give his OK."
"Your tests show that foamed domes can be protected against fires, but there are no good tests for unconventional building materials as far as I am concerned."
"I like the idea, but foam board does not have the impact resistance of cement."
"We design a lot of recreational facilities, and kids will find a way to poke holes in the foam."
"Building codes in our area are written for wood and cement structures. Maybe we'd be interested if the codes change."
After this unexpected reaction, management didn't know what to do. Preston still thinks they should go ahead with the project. She wants to build several more demonstration projects in the United States and at least three each in Europe and Japan to expose the concept in the global market. She thinks architects outside the United States may be more receptive to really new ideas. Further, she says, it takes time for potential users to "see" and accept new ideas. She is sure that more exposure to more people will speed acceptance. And she is convinced that a few reports of well-constructed domes in leading trade papers and magazines will go a long way toward selling the idea. She is working on getting such reports right now. But her managers aren't sure they want to OK spending more money on "her" project. Her immediate boss is supportive, but the rest of the review board is less sure about more demonstration projects or going ahead at all-just in the United States or in global markets.
Evaluate how ApplPoly Products got into the present situation. What should Abby Preston do? What should Preston's managers do? Explain.
Abby Preston, a chemist in ApplPoly Products' resins laboratory, is trying to decide how hard to fight for the new product she has developed. Preston's job is to find new, more profitable applications for the company's present resin products-and her current efforts are running into unexpected problems.
During the last four years, Preston has been under heavy pressure from her managers to come up with an idea that will open up new markets for the company's foamed polystyrene.
Two years ago, Preston developed the "foamed-dome concept"-a method of using foamed polystyrene to make dome-shaped roofs and other structures. She described the procedure for making domes as follows: The construction of a foamed dome involves the use of a specially designed machine that bends, places, and bonds pieces of plastic foam together into a predetermined dome shape. In forming a dome, the machine head is mounted on a boom, which swings around a pivot like the hands of a clock, laying and bonding layer upon layer of foam board in a rising spherical form.
According to Preston, polystyrene foamed boards have several advantages:
1. Foam board is stiff-but can be formed or bonded to itself by heat alone.
2. Foam board is extremely lightweight and easy to handle. It has good structural rigidity.
3. Foam board has excellent and permanent insulating characteristics. (In fact, the major use for foam board is as an insulator.)
4. Foam board provides an excellent base on which to apply a variety of surface finishes, such as a readily available concrete-based stucco that is durable and inexpensive.
Using her good selling abilities, Preston easily convinced her managers that her idea had potential.
According to a preliminary study by the marketing research department, the following were areas of construction that could be served by the domes:
1. Bulk storage.
2. Cold storage.
3. Educational construction.
4. Covers for industrial tanks.
5. Light commercial construction.
6. Planetariums.
7. Recreational construction (such as a golf-course starter house).
The marketing research study focused on uses for existing dome structures. Most of the existing domes are made of cement-based materials. The study showed that large savings would result from using foam boards, due to the reduction of construction time.
Because of the new technology involved, the company decided to do its own contracting (at least for the first four to five years). Preston thought this was necessary to make sure that no mistakes were made by inexperienced contractor crews. (For example, if not applied properly, the plastic may burn.)
After building a few domes in the United States to demonstrate the concept, Preston contacted some leading U.S. architects. Reactions were as follows:
"It's very interesting, but we're not sure the fire marshal of Chicago would ever give his OK."
"Your tests show that foamed domes can be protected against fires, but there are no good tests for unconventional building materials as far as I am concerned."
"I like the idea, but foam board does not have the impact resistance of cement."
"We design a lot of recreational facilities, and kids will find a way to poke holes in the foam."
"Building codes in our area are written for wood and cement structures. Maybe we'd be interested if the codes change."
After this unexpected reaction, management didn't know what to do. Preston still thinks they should go ahead with the project. She wants to build several more demonstration projects in the United States and at least three each in Europe and Japan to expose the concept in the global market. She thinks architects outside the United States may be more receptive to really new ideas. Further, she says, it takes time for potential users to "see" and accept new ideas. She is sure that more exposure to more people will speed acceptance. And she is convinced that a few reports of well-constructed domes in leading trade papers and magazines will go a long way toward selling the idea. She is working on getting such reports right now. But her managers aren't sure they want to OK spending more money on "her" project. Her immediate boss is supportive, but the rest of the review board is less sure about more demonstration projects or going ahead at all-just in the United States or in global markets.
Evaluate how ApplPoly Products got into the present situation. What should Abby Preston do? What should Preston's managers do? Explain.
Explanation
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BASIC MARKETING 18th Edition by Jerome McCarthy William Perreault, Joseph Cannon
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