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Brand Pipe Company

Group 2 (Section B):
Bunny Sethi Faizan Syed Vikrant Singh Sharique Ali Geetansh Lal Ravi Kumar Bable
Garga Majumdar Arjun Nair

and Northern California Products Portfolio : Poly. PVC. Idaho. believed in personal selling The s alespeople were assigned by three geographic areas. serving Pacific Northwest It is the seco nd largest company of the region States served by Brand Pipe: Oregon. and Styrene M ajor Competitors : Sierra Plastics. Washington. ABS. and Tamarack Pipes Promotion an d Sales: Limited amount spend on advertising.Brand Pipe Company Brand pipe is a plastic extruder company. Portl and & eastern Oregon-eastern Washington area & the southern Oregon-northern Cali fornia area Distribution: Sold majority of its pipe through distributors Distrib utors margin:5-10% . Brand Pipes. namely: Seattle-Puget.

thus a lot depended on them Inefficiencies in the process (both due to material wastage and machine changeover) Lack of focus on segments . Buford (GM) was told to come up with a Specific marketing strategy & plan to stop the losses. Provide a base for contin ued growth The loss can be attributed to various reasons such as : Increase in competition in every sector to which it catered to. Heavy dependency on the distributors who were not the exclusi ve ones.The Problem The Brand pipe division of the company was making losses on account of which Mr. thus eroding the average price/lb.

0039 PVC is the single product which has been generating profit for the company Only PVC & Styrene have positive contribution margin PVC contributes to major portion of revenue .Product wise Analysis Product Direct Margin Share of revenue(%) Profit(per pound basis) Poly -0.0392 61.0623 Styrene 0.98 -0.0122 15.0532 PVC 0.0275 14.9 -0.75 0.0017 ABS -0.0135 7.3 -0.

000 131175.000 53419.800 Poly Gross sales price Less discounts.000 260844.000 131175.640 32404.336 38526.000 -6075 .5 3532.000 17865.000 137250.400 246132.900 -29649. freight and allowances Net sales price Less Va riable costs (raw materials and conversion) Less Variable costs(when 7% wastage is eliminated) Direct margin (contribution to fixed costs) Less fixed costs Prof it 163125.000 260844.000 -23940.010 ABS 280531.200 863233.500 17865.66 8877.800 38526.400 246132.510 145162.400 38906.000 32404.Effect of reduced wastage Poly Gross sales price Less discounts.000 217752.900 -47908.700 Styrene 285038.200 251463.000 202509.500 6580.200 863233.800 11217.800 -4024.800 1014976.200 29068.700 ABS 280531.000 802806.000 217752.69 212169.500 PVC 1068396.800 1014976.000 53419.000 151743.000 137250.800 242585.000 31950.000 28380.200 29068. freight and allowances Net sales price Less Va riable costs (raw materials and conversion) Direct margin (contribution to fixed costs) Less fixed costs Profit 163125.800 -9381.36 43622.8 40 .200 145162.000 127642.500 670 07.400 38906.5 64 Styrene 285038.000 PVC 1068396.000 -14332 .000 31950.200 251463.

00.8% *Assumption that the plant operates 6 days a week Reasons for changeover: Tight limit on finished inventory goods Rush orders .400 Annual loss due to changeover (% of revenue) = 2.Cost of machine changeover Total revenue =$ 18.000 Cost of changeover / day .$ 175 Total cost of change over (annual)* = $ 50.

100% 4 5%.75 0.00% Decision Agricultural Irrigation Private potable water system market Mobile Home market P ublic potable water Industrial market Turf Irrigation market Drain waste and ven t market Conduit Sewer and Outside drain Gas Transportation market Water well se rvice and stock water PVC PVC/Poly/ABS ABS PVC PVC/Poly PVC ABS .4.1 1.5.9 1.00% 0.78% 0. Regional) 17%.0% 75%.13.350 0.90% 100%.0 .35% 50%.6.16.5 0.50% 90%.3 Five year growth rate(Washington. 0%.2.0.8 0.90% PVC .4 2.Market Segment Decision: Market Segment Plastic Type Used Market Size(Washington.57% 27%. Regional) millions poun ds 8.465.5 0.145.10% PVC/Poly Styrene/PVC P VC/Poly/ABS PVC/Poly Yes No No Yes No Yes No Yes Yes No NO .45% 66%.1 3.

Recommendations: Move out of Poly and ABS Focus on following markets: Agricultural irrigations. Turf Irrigation market. P ublic potable water. Conduits. and Sever and outside dra in Stop taking rush orders or charge a premium to cover the changeovers Concentr ate on solving the problem of inefficiency ( more plastic used) Segment the sale s force product wise rather than on geographical basis A part of compensation of sales force should be variable depending upon the sale that they generate .

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