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SP Jain School of Global Management

GROUP 6

SEALED AIR CORPORATION

Anubhav |Apratim | Jatin | Meenal | Saumya

Further. The company has 8 different products with different layers and different bubble size depending on the load requirement. Let’s discuss the corporate culture of company. In essence. the company has a strong set of core values which it has consistently been following through with. the company aims to use its expertise in technology by differentiating itself from its competitors because it is the only long term guarantee of market leadership. The company has presence in England. Sealed Air Corporation has achieved its success with a strong focus on customer orientation. This fact was validated by the fact that both distributors and end users regarded Sealed Air’s salespeople as amongst the best trained and most knowledgeable in the packaging industry. most materials used for protective packaging were produced primarily for other purposes. the company has been leading innovation by being the first to introduce the foam-in-place packaging systems and also pioneering the first complete solar heating system for swimming pools. The company’s sales force was also known for its consultative approach towards selling .Sealed Air Corporation has been a market leader in protective packaging material for last ten years. Sealed Air Corporation was one of the first companies to approach the market with a strong customer orientation which means that it began product development only after analyzing and understanding the exact needs of its customers. In 1970. Sales force salaries were above average and were composed of a base salary plus commissions. The company has barrier coated bubble material known as AirCap that differentiates it from other competitors. CORPORATE CULTURE Sealed Air Corporation has a corporate history which has been characterized by technical accomplishment and market leadership. The company has chosen a strategy of differentiation from its competitors and has not been afraid to take the path less trodden amongst its competitors. France and Germany. In the last 10 years alone. The president and CEO of the company has come out with a statement saying that the company intends to follow the same management guidelines it has been through the 1970’s in the 1980’s as well. There was a strong focus on people within the organization. The company placed an extra emphasis on training and retaining its staff.

426 42. Ft Jan-June 1980 A-100 SB-110 SC-120 SC-240 ST-120 ST-240 SD-120 17. the uncoated bubble is comparable to three 120 lines of coated bubbles.850.467.524.41 690.52 3.20% 2.82 1.36 106. On an average. When customer understand the close similarity between the two products they are very likely to defect.513 81. These consumers are both price sensitive and have light loads or short shipping cycles. a salesperson called upon 20 end users and checked in with two or three distributors.68% 1. Also.014 4.60% . it stressed on keeping excellent relations with the distributors which resulted in a high level of loyalty displayed by the distributors even though they kept competitors products. Sealed Air had a focus on a very selective selection process as far as its distributors were concerned.72 1.63% 27.78 2.10 249. GAFCEL’s ability to win sales of a huge magnitude to the tune of $1 Million/year with minimal sales force is an indication that the uncoated bubble will remain a strong competitor. FOR INTRODUCING AN UNCOATED BUBBLE: 1) After observing the data in the case study.59% 121.82% 21.80 255. Furthermore.47 876. UNCOATED BUBBLE Although the company has enjoyed leadership position but now it’s facing competition from uncoated products and is thinking of launching the uncoated bubble product. Unit Sales in KSq.products.03% 22.93% 1.97% 17.58 1.170.84 $K Contribution $K Contribution %age share 2.624 366. In a week.914 43.80 $K Sales $K Sales %age share 2.266.07% 11.91% 11. it can be inferred that in some cases a customer’s needs would be met very well by the uncoated bubble. By introducing uncoated bubbles.94% 1.46 105.802 48. The emphasis was on displaying to the consumers how the savings could be made in terms of material and labor and in terms of reduction of damage.234 3. This argument can be reinforced by trends in Europe.78% 31. Once selected however.858. For lighter loads.80% 14. salespeople spent about half their time making cost studies at user end locations. Sealed Air will be able to retain these customers.18 2.

6 less for ½” category.5% less than the coated product for 3/16” category and 75. The company cannot risk the main products whose contribution to overall sales is more than70% and this introducing a new product makes sense.62% 2) As per the calculations shown in the table above the SC-120. Sealed Air may also end up losing their distributor network to the competitors or may find themselves locked out of some key channels for its products that it had one time ‘owned’.64 20.617.99 31. Uncoated 3/16" (Page 7) Selling Price to Distributor Variable Manufacturing Price Freight Total Variable Cost Contribution %Contribution %Decrease in contribution from coated to uncoated (Cannibalization Cost) 31.713.64 9. launching uncoated bubbles could lose the company as much as 68% of the profit margin. Sealed Air would have a higher variable cost component when compared to GAFCEL because it is positioned as a high-end player.4% -56. ST-120 and SD-120 are the most important products for the company and they will get affected by the competition from uncoated cheaper packaging material. However.40 19.7% Coated 1/2" (Table D) 65.6% 2) Also.31 29.5% -75.03 21 7.SD-240 SD-480 Total 21.865.358 1. 4) It is critical that Sealed Air introduces uncoated bubbles to maintain the excellent relationship it has with its distributors otherwise distributors may end up stocking the products of competitors and at the worst.43 13. As shown in the table above the margin for uncoated products is 56.1 19.58% 0.93 36. 3) No R&D investment is required while introducing uncoated bubbles into the market.35 28.04 44.55 12.56 22.18 5.93 7.69% 1.15% 744.63 19 2.43 95.799 1.38 7.93 28.5 17. AGAINST INTRODUCING AN UNCOATED BUBBLE: 1) The most vital argument against introducing an uncoated bubble offering would be possibility of cannibalizing its high margin coated bubbles.94 52.92 2.6% Coated 3/16" (Table D) 43.7% Uncoated 1/2" (Page 7) 36.13 12. The new product might eat the share of coated bubble products and this will affect the overall profitability of the company as coated products have higher margin than the uncoated product. .64 21.

3) Some distributors are complaining about having too many products. If distributors decide to cut back on the number of products coated bubbles could be reduced. 6) There might be challenges in motivating a top-quality sales force to sell a lesser quality and lesser margin product which could mean a reduction in their incentives. Promotion: Previously the sales force was promoting against the uncoated bubble protection by talking about the advantages of the coated bubble protection. This can be handled by reducing the number of coated bubble products which might get substituted by the new product. This issue can be sorted by making the product different from current products in the market. cardboard and foam users and not against the existing uncoated bubble packaging users. as this will confuse and irritate the channel and customer. It can be taken care by positioning the product for the paper. 3. Cannibalization: The major problem that we have to overcome while launching the new product is cannibalization. The quality should be better than existing uncoated products in the market but shouldn’t compete with coated air bubbles. Now the same sales force cannot start selling uncoated bubble products. THE PROBLEMS THAT NEED TO BE OVERCOME FOR LAUNCHING THE UNCOATED BUBBLE ARE 1. . 5) Naming of the new product will be a problem – if they go for new brand name. This can be done by using different colours or may be different packaging and different size of the bubbles. Another problem is that product might be perceived as “me too” products with so many similar products in the market. then they have to invest in building awareness around it and if they keep their existing brand name then their brand might be diluted. However this problem can be solved by positioning the product not against the existing uncoated players but against the paper based and foam protection. 4. 4) Launching an uncoated bubble product will be against the long-standing tradition of innovation of the organization. The distributors have already too many products and they are not willing to carry too many options. 2.

Sealed Air may eliminate lighter product A-100 as it will be replaced by uncoated bubbles. should be introduced at significantly lower prices than its traditional product line i. Uncoated bubble packaging should differ in quality. i. they must pursue the flanking strategy and come up with a new product that would safeguard their core product i.e. foam. and increased levels of service. The 4P marketing plan for the new product is given below: PRODUCT By using a flanking strategy and come up with product a level below their existing product. pieces of foam. AirCap and also bring sales for Sealed Corp making them the market leader. AirCap. PLACE UCwrap should be placed with retailers and distributors.e. To achieve this. The lower prices will make it feasible for customers who had previously used cardboard. The prices of the different products in the market are given below: . Also the incentives for sales team should be increased so that they stay motivation. This way AirCap can maintain its superior image.e. etc to consider using bubble wrap packaging. PRICE The uncoated bubble wrap packaging by Sealed Air Corp called UCwrap. It should be positioned in a way that there is clear distinction in the uses of coated and uncoated bubbles in the eyes of consumers. They should name it UCwrap by Sealed Air. cardboard. color and design. an uncoated product. This will also appease distributors as they are not happy with lot of grades in coated bubbles market.MARKETING PLAN Sealed Air Corp’s objective is to be the market leader in the growing market. It should be simultaneously introduced both in Europe and US. It should be positioned for the users of paper. etc packaging and not for the current users of uncoated packaging. This way. It is important to leverage the brand name of Sealed Air and the new brand should have association with the Sealed Air. it will be able to differentiate in the market. wide scale distribution. paper. The channels partners should be given higher margins so as to motivate them to recommend this product rather than the competitors. with a large-scale market introduction. This will significantly expand the Sealed Air’s market.

07 AirCap Coated $67. which would make it 68.50 $65. etc to incorporate it into their consultative sales pitch.00 Foams $52. the same consultative method as used presently for selling AirCap should be used by the salespeople. foams. Importantly.00 $54.70 $50. all promotional efforts must target packaging. Additional promotional efforts should include direct mailings to potential clients in the US and Europe.53 $41. cardboards.10 $55.32 The proposed prices of UCwrap are given below: Thickness/ Height 3/16 4/16 – 6/16 ½ UCwrap $39. As their sales force is burdened with selling Instapak systems. cardboard. so some additional salespeople should be hired by Sealed Air Corp so that they are able to promote USwrap. Sales force training: Training should be arranged for the sales force as USwrap also targets the consumers who use paper. PROMOTION 1. etc.00 $109.84 -$57. they need to educate the users that this product cannot be used for heavy loads. Advertising: Advertising should target consumer who use paper-products. Also. etc. It should leverage the company’s highly trained sales personnel. Additional sales force: For promoting UCwrap. We suggest that 10% more sales people should be hired to the existing sales force of 62. AirCap cushioning and other Sealed Air products. cardboard.72 -- Astro uncoated $47. volume discounts to be offered for the bulk orders. It is necessary as they need the knowledge of the new type of customers of paper.42 $94.Thickness/ Height 3/16 4/16 – 6/16 1/2 PaperBased $27. 3.35 Also. relative benefits and long-term cost savings afforded by superior bubble product should be stressed.60 $65. 2.56 $78. .75 GAFCEL uncoated $42.