Case Analysis: Curled Metal Inc

Issues to be addressed
CMI needs to address several key issues for their new metal pads. First, they must decide on a pricing
strategy and ultimately a price for the new metal pads. Second, the company must develop strategic and
marketing objectives and must decide which channels to market the pads based on the selected pricing
strategy.
Analysis & Recommendations
Pricing Strategy
a) Pricing objective: CMI should emphasize on maximizing quantity and profit margin (the
corporate management expects a contribution margin of 40%-50%).
b) Pricing Strategy: CMI should consider setting the price at the production cost plus a certain
profit.

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c) Price Calculation:

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Kendrick Foundation Company Corey Construction Average

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Parameter

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Conventional Pads CMI Pads
Conventional
CMI Pads
Conventional
CMI Pads
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Pads Pads
No. of sets required 20 1 50 1 35 1
Not
150 Not charged 120 135 -
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Kendrick cost per set charged

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Total pad cost 3000 - 6000 - 4725 -

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Considering a contribution margin of at least 40%, the price can be set around $740 per pad. Willingness
to pay calculation is done below:
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 Calculation of Willingness to Pay (WTP)

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Marketing Strategy
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 CMI should focus on promotions to educate customers and create awareness about the benefits of
using their product. They can use seminars like “Pile Talks” to make people aware of the product
and its benefits.
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 Use sales representatives to educate customer about the cost savings of CMI pads and potential
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dangers of asbestos.
 Use word of mouth as key influencer to endorse the product. For this they can consider taking
help from the pile hammer manufacturer as they can be good influencer for recommending the
products to customers. Also, Professor Stephen McCormack who had established a department at
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Pennsylvania A&M University can be considered as potential influencer as he was a respected

authority on theoretical aspects of pile driving.
 Advertise in business magazines to target the undecided market and also publish the test results in
magazines and newspaper to demonstrate the benefits of using CMI pads.

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