Sealed Air- AirCap

1
Sealed Air- AirCap

• Sarthak Shah
• Julia Kim
• Inggi Winata

Aurelie Operiol Alexandre Bonnier Nelly Tanizar
Abe Feng
2
History

• Bubble history
• Growth
• Uncoated bubble wrap threat
• European markets

3
Translation

• (English ? English)
• I love AirCap bubbles, they always protect and I
  can pop them when Im done!

• (French ? English)
• Look, this product made it through shipment well!
  It only has a few bruises on it!

4
US Market Recommendations

• Part 1 Increase sales force
• Part 2 Enforce 35
• Part 3 Educate end users
• Part 4 Test uncoated with distributor

5
European Recommendations

• England Launch SIBCO
• Under the Sealed Air umbrella
• France Continue SIBCO
• Watch AirCap
• Germany Launch SIBCO
• Watch AirCap

6
SWOT, Strengths

• Market leadership
• Innovation
• Good Marketing and Sales
• Loyalty of distributors

7
SWOT, Weaknesses

• How to market uncoated bubbles
• Selective distribution
• Inconsistent sales representatives

8
SWOT, Opportunities

• Uncoated bubble sales increasing
• Europe becoming more price sensitive
• Further AirCap growth in US

9
SWOT, Threats

• GAFCEL in US, uncoated bubble maker
• Sansetsu in Europe, Germany
• Quality uncoated bubbles
• Lower price
• Declining coated bubble market (Europe)

10
US Market Recommendations

• Part 1 Increase sales force
• Part 2 Enforce 35
• Part 3 Educate end users
• Part 4 Test uncoated with distributor

11
US Part 1 Increase sales force

• 4 additional salesmen
• More distributors More sales
• Maintain Loyalty
• First line distributors
• 61 Distributor/Salesmen ratio
• Distributor capacity 370 394
• Makes financial sense

12
US Part 1 Increase sales force

• Income of around 40,000
• Adjusted for inflation early 80s
• Fixed costs from salaries
• Increase 3.72
• Sales
• Increase 6.57

13
US Part 2 Enforce 35

• Time Instapak 60, AirCap 35
• Salesman currently 20 to AirCap
• Distributors currently unhappy
• Incentive
• Increase AirCap Commission 2.5
• Happy distributors more sales

14
US Part 3 Educate end users

• Distributors not educating end users
• End users dont know AirCap advantages
• End users will pull sale from distributors
• Pamphlets
• 1 for every 5,000 sq ft

15
US Part 4 Testing uncoated

• Test with large client on trial basis
• Large client 2-3 first-line distributors
• Less risk than in open market
• Trial basis 1 year trial

16
Uncoated Test Implications

• Successful
• Uncoated penetration
• Readiness

• Not successful
• AirCap dominance
• Hold US Market

17
European Recommendations

• England Launch SIBCO
• Under Sealed Air umbrella
• France Continue SIBCO
• Watch AirCap
• Germany Launch SIBCO
• Watch AirCap

18
Europe- England

• AirCap still strong
• 68 Market Share
• Good distribution
• Competitor Sansetsu
• Uncoated cost
• 50 less than AirCap
• Uncoated bubble growth

19
Europe- England

• Launch SIBCO
• SIBCO unprofitable alone
• Under Sealed Air umbrella
• Uses Sealed Air salesmen
• Uses AirCap distribution
• No additional investment
• Expectations
• AirCap down, SIBCO up

20
Europe- England MARKETING SIBCO

• Already buying
• Dont mention SIBCO
• SIBCO still in catalogue
• Emphasize AirCap performance

• Not buying
• Briefly mention SIBCO
• Alternative
• SIBCO lacks AirCaps performance

21
Europe- France

• SIBCOs home
• Sealed Air 31 Market Share
• 17 SIBCO
• 14 AirCap
• Uncoated growth expected
• 1978- 50 coated, 50 uncoated
• 1980- 30 coated, 70 uncoated
• Uncoated- 40 less than AirCap price

22
Europe- France

• SIBCO
• Natural growth
• Expect AirCap to lose market share
• AirCap no longer profitable
• Pull the plug

23
Europe- Germany

• AirCap late into market
• Never did well, Losing ground
• Sansetsu Domination
• 78 market share
• AirCap- 5.2 market share
• Coated bubbles unpopular
• Uncoated cost- 35 of AirCap price

24
Europe- Germany

• AirCap unprofitable
• Pull the plug
• Introduce SIBCO
• SIBCO to use AirCap distribution, sales
• No additional cost
• Realistic Expectations

25
Financial Analysis

• Overview
• Part 1 Increase sales force by 4
• Part 2 Enforce 35 through increased commission
  (2.5)
• Part 3 Educate end users through pamphlets
  (0.50 pamphlets)

26
Sales Forecasts

• 6.5 Sales Increase
• 370 distributors w/ 713,000 sq ft. avg volume per
  distributor
• 62 sales representatives
• 370/62 6 distributors per rep
• 4 new sales representatives
• 46 24 new distributors
• 24713,000 -gt 6.49 more business

27
Important Variables

• Pamphlet Amortized Cost (0.50 pamphlet)
  variable
• Commission increase variable
• Number of new employees at 40,000 salary fixed

28
Decision Possibilities (Exhibit 1)
Pamphlet Cost (Amortized) Commission Number of Sales Reps (40,000 salary) Break-Even Point Estimated Profit Increase
0.10 2.50 4 3.72 2.75
0.10 2.50 5 4.41 2.07
0.10 2.50 6 5.10 1.38
0.50 3.00 6 7.60 -1.07
0.50 3.50 4 6.73 -0.22
0.50 3.50 5 7.44 -0.91
0.50 3.50 6 8.16 -1.59
29
Break-Even (Exhibit 2)
30
In-Depth Analysis (Exhibit 3)

• Original contribution 22.16
• New contribution 21.95
• Extra commission
• Pamphlet cost
• Break-Even 3.72
• Retain last years profits and cover the 160,000
  fixed costs
• Projected Sales Increase 6.5
• Profits 2.75

31
Profit Estimations (Exhibit 4)
32
European Market (Exhibit 5)

• Fixed Costs 0
• Contribution
• Germany 10.94
• France 9.76
• England 2.66
• Break-Even 0 (profitable from the very first
  sale)

33
Conclusion

• US Market Recommendations
• Part 1 Increase sales force
• Part 2 Enforce 35
• Part 3 Educate end users
• Part 4 Test uncoated with distributor

34
Conclusion

• European Recommendations
• England Launch SIBCO
• Under Sealed Air umbrella
• France Continue SIBCO
• Watch AirCap
• Germany Launch SIBCO
• Watch Aircap

35
Overall Goals

• Europe
• Market share in France, Germany
• Sansetsu
• US
• Maintain AirCaps strength
• Monitor uncoated penetration

36
THE END
http//www.urban75.com/Mag/bubble.html