Section C| Group 6

Kshitij Yash H21145 | Lakshmi Venkatesh H21146 | Meghna Puri H21147 | Mohan Krishna Yalla
H21148 | Shashwat Krishna H21166

In a Bind: Peak Sealing Technologies’ Product Line Extension Dilemma

Q. Should PST introduce an economy tape line?

A. We recommend PST start with the economy tape product line because of the following reasons:

 The distributors had already requested PST for an economy tape line, keeping in mind the
demand of the consumers.
 For package seals, many consumers solely concentrated on the price per roll, so it would be
prudent to have an economy tape line for such a segment.
 The market in Boston was open to price sensitivity – even minor changes in quality of product
could be compensated with competitive pricing.
 The competitors of PST, i.e., I-pack and Tensile, had already introduced low grade seals at
attractive prices.
 According to the distribution satisfaction survey of 2012, there was about 20% lower satisfaction
for K-2 sales force.
 The existing tapes produced by PST are more expensive and relatively complex for generic use.
 Although the users could face heavy losses, in terms of missing, with the lower grade tapes that
tend to get brittle with excessive heat or cold, the economy tape would be a good idea to go
ahead with because of the consumers’ focus on delivery dependability.

In case we had to advise against the introduction of the economy tape line, the following two
factors would be the major highlights:

 Failure of economy tape, on the technical front, could lead to higher customer dissatisfaction.
 GP-48 tape was an incumbent lower cost option in this segment, and a good one, given it
produced 7% of the total sales in the K-2 lineup in a period of 6 months.

Moving forward with this product line, there are certain factors that would aid PST in making this
line a success. Some of them are as follows:

 PST can leverage its high experience to produce economy tape at a cheaper rate.
 A dedicated sales force should be existent to make consumers aware of this line, given how PST’s
sales force had focused too much on other products until now. Also, this sales force should be
trained to dealt with both end users and distributors as the distributors played a major role in
making PST consider the economy tape line.
 The cost of production would be minimal, considering low start-up expenses.