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3. How big is this market? What kind of opportunity is this for CMI?

The product that the Cumberland was going to launch was cushion pads, which is an

integral part if the pile driving process. Pile driving was generally done with a large

crane, to which the diesel or steam hammer inside a set was attached. The cushion

pads prevented the shock of the hammer from damaging hammer or pile. Despite the

importance of these pads in the pile driving process, little attention had been paid by

most of the industry.

There was a tremendous demand for this product as it was sold by unorganized

retailers. Based on industry sources and a 1977 Construction Engineering magazine

report, he estimated that approximately 13,000 pile hammers were owned by

companies directly involved with pile driving, with another 6,500 to13, 000 leased.

No of Hours per week 30 No of weeks per year Hours/per hammer per year 750 pile

driving per hour (Ft) 20 Ft/yr. No of Pads per 10000 ft.

The company also assumed that the total of 19, 500 to 26, 000 hammers would operate

about 30 hours per week and 25 weeks per year, which equates to 750 hours per

hammer per year. They further assumed that most jobs would average 20 feet of pile

driving per hour. According to these figures, a range of 290 million to 390, 000, 000 of

piles were driven annually (calculation: 26, 000 hammers x 750 hours/ hammer yr. x 20

ft. / hr. = 390, 000, 000 feet / yr.). They also assumed that a total of 6 CMI pads would

be required to drive 10, 000 feet. Based on these numbers, the potential market
demand for pads could range between 174, 000 to 234,000 per year. These numbers

shows the size of the market this product has. It was a tremendous opportunity for the

Cumberland Inc. to capitalize on.

Obviously, there is a tremendous potential for this product and it could pay huge

dividends for the company. To reap these rewards, CMI must understand market for

cushion pads, settle on an optimal price, and develop a market strategy that will bring it

all together. The market and distribution network for cushion pads is not well

established or defined, as cushion pads are viewed only as a necessity. CMI must

change this attitude by spreading word of its benefits as a potential work-saver through

industry influences. A large portion of their marketing efforts should focus on

architectural and consulting engineers because of their influence over the contractors

who will use the pads. Manufacturers are also important influencers, as CMI can use

their representatives to both market and sell the pads, taking advantage of their existing

relationships with 75% of pile driver users.