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COMMERCIALIZING THE KUNST 1600 DRY PISTON VACUUM PUMP

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Introduction

COMMERCIALIZING THE KUNST 1600 DRY PISTON VACUUM PUMP ANA MARIA TUDOSE GROUP 13 The purpose of this report is to analyse the alternative market segments of Kunst Vacuum Pump Company and give suggestions for their next move. Based in Minneapolis, Kunst Vacuum Pumps is the recently acquired U.S. Division of Atler GmbH. During the previous fiscal year, Kunst sales soared to a 75-year record of $120 million. The firm manufactures top-end (i.e., 6 or more CFM) vacuum pumps for use in highly demanding laboratory, health care, and industrial applications. For example, in the lab, engineers rely on Kunst pumps in freeze-drying, vacuum oven, and distillation processes. In high tech industries, operations personnel employ Kunst pumps in the production of cathode ray tubes and computer chips. From a technical standpoint, Kunst pumps provide a "deeper draw" (i.e., they can evacuate chambers down to almost a perfect vacuum) and are more efficient at lower pressure levels than competing models. Scientists, engineers, and health care professionals highly regard the Kunst brand name. Not surprisingly, Kunst holds a 60% market share in laboratory, health care, and industrial applications. Evan Stone, a senior product manager at Kunst Vacuum Pumps had to identify and target high potential market segment(s). He planned to do so by determining in which segment(s) the Kunst 1600 stood to deliver the greatest value. ...read more.

Middle

dictate how repair work is completed. The market research certainly hasn't supported Evan's initial beliefs, yet there still may be an opportunity for the Kunst 1600. The Kunst 1600 does not require oil changes as opposed to traditional pumps, which require an oil change after each use, or once a month, thus saving time and money. It takes 1 hour for a Kunst pump to complete a job for Ac repair firms, thus it is not profitable. For light commercial and home repair firms, a Kunst vacuum pump will bring 2 more jobs per week, because by working at lower pressure levels it reduces vacuuming time by 10 minutes. The price of Kunst vacuum pump is 400$, which is twice the price of Air Master competitor, and 150$ more than the price of the pumps made by Pumps Wizard. The resale price for Kunst is 500$. Value and price elements of Kunst 1600 are: ? The pump doesn't require oil ? It has the ability to work more efficiently at lower pressure levels, which can reduce vacuuming time Additional value placeholders that merit consideration: ? Projected lifetime of 6 years ? Has fewer internal parts, thus it takes more physical abuse ? It weights less than other pumps Customer value model for residential AC: Residential AC repair has a potential market of 125 000 units per year. ...read more.

Conclusion

This will increase the average revenue. Because Kunst doesn't require oil, light commercial refrigerator firms can also reduce their costs. They won't have to pay 4$/oil + 0.5$/scouring soap + 0.15$/towels = 4.65$/oil change. Technicians change oil once a month during working hours between jobs and it takes 30 minutes. Without having to use oil, firms will increase their number of jobs and reduce their costs. Considering the customer value models for all three market segments, Kunst should put their commercialization efforts in light commercial refrigerator repair segment. To breakeven with the capability of the main competitor (AirMaster), Kunst will have to decrease their selling price to about 170$. In this market segment Kunst will have to compete a vacuuming speed class very close to their. AirMaster has a vacuuming speed of 1.5 CFM and Kunst has a 1.6 CFM speed. What makes them special is their ability to work more efficiently at lower pressure levels. With this ability Kunst can increase the number of jobs per week for the light commercial refrigerator firms. Because the Kunst pumps don't require oil, firms can also reduce their costs and have bigger average revenue. Furthermore, Kunst will have to have an aggressive and long sustained marketing effort for entering the market segment. Kunst value preposition, as stated in the conclusion paragraph, is to reduce the firm's costs and to increase the number of jobs. Hence, this is the most suitable market for them. ...read more.

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