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SEALAX: A CASE STUDY ANALYSIS

....................................................0 MARKETING OBJECTIVES AND STRATEGY.............................7 3................................................................................................................................................................2 Weaknesses....3 1......................................................................... 12 REFERENCE LIST.....................................4 Threats.................................................................................................................7 3......... 4 2.............................................3 1...............1 Product Design and Development...................................................................5 Conclusion.........000 Litres)..........................................................................................................2 Strategy statement.............................................................12 3.................................................................... 3 1.........................................................5 2.....................................5 2.......................3 1..................................5 3................................................................... 13 ..........2 Distribution Strategy.................0 SWOT ANALYSIS.............1 Marketing and Financial Objective..............................................3 Opportunities. 4 1................................................................................MARKETING PLAN Contents Contents..........0 MARKETING MIX DEVELOPMENT..................................................................1 Strength......................................... 2 Introduction........................................8 W4 – Licence 3 Multinational Companies to produce and sale the Multi sealer at an additional premium of $ 5 Per litre sold (5 x 200......................................................................

The product performance is well known amongst builders. such as. air-con condensers. Leading innovation of a multi-surface sealant 1. 1.000 litres per year can be used to produce the new sealant. The Product is not branded . Capacity to produce 150.2 Weaknesses The existing product is not known by the public. landscapers and gardeners. John Williams wish is that the new product will solve the company’s woes and give it a competitive edge over its rivals. cushion covers and garden umbrellas among others. water heater. bricklayers. Sealax has declined 30% the past 3 years because of intense competition from larger sealer manufacturers. He has come up with the idea to produce a “single protective sealer for anything and everything” because there is clear need for such a product that is unmet. John Williams realised the sun damage to other items that are kept outside is extensive. The owner.000 litres of the product Capacity for research and development Possibilities for price flexibility The existing excess capacity of 50. brick walls and roof tiles. fabric items like.Introduction Sealax has been in operation for the last 50 years and produces sealer which is used to protect outside items from sun damage. Its range of Sealers is specifically designed to give a protective coat to pavers.1 Strength It’s an established business for the past 50 years and has in-depth knowledge of the product. outdoor furniture.0 SWOT ANALYSIS 1.

The new product will incur substantial cost attached to it that is sales representative costs. The technical breakthrough has no guarantee of success within the market as it is unpredictable as to whether the new product will attract market response resulting from its marketing. The product is able to protect the surfaces of various objects over a period of twenty years. the public is ignorant of the brand. The sealer can restore the slightly faded items to their original appearance and protect them for a further ten years.3 Opportunities The idea of a single protective sealer for anything and everything will be the first of its kind within the Australian market It is hoped that the majority of the initial sales will be generated from home owners who want to restore their partially faded items as the benefit is more immediate and visible. instead relies on regular trade customers for the past fifty years. 1. It seems like there is no guarantee against future sun damage to objects. The fact that Sealax has to pursue market creation of a market with a theoretical potential of 500. The consumer attitude towards the product will determine a lot. travelling cost. 1. Crommelin Natural Finish Sealer for outdoor pavers and fabric protection like Scothguard. advertisement costs. product costs. storage costs and administrative overheads. but.000 houses in Perth. The product is highly unsought as it is a preservative product with no immediate tangible benefits.Since Sealax does not actively market its product. . packaging costs. does not guarantee that every household will use the product. delivery costs.4 Threats There is indirect competition from other available specialty sealers for specific surfaces from competitors such as Wattyl Lacquer Finish for metal objects. It is impossible to set a new price for the new product as customer response is unpredictable as the product will be the first of its kind in the market.

An internal and external analysis has been undertaken to help identity the key internal strengths that can be capitalized on and weaknesses that should be eliminated or avoided. during this time Sealax has not marketed its product neither does the public know the brand.1 Marketing and Financial Objective A marketing Strategy refers to the approach or the game plan to be adopted to link the product and the consumer whereas the objective is the intended purpose in order to achieve the ultimate goal of the company (Sealax). Specific Objectives To surpass present sales by an additional 50. These are the precepts of this marketing strategy. while at the same time looking at the opportunities available from the market and threats posed by the environment.000 units within 12 months period to within Perth and its environs direct production by Sealax To bring on board 3 Multinational Companies with a global presence and perspective to be contracted production of the multi surface Sealant under license for their target markets. Up to a year ago little or no research had gone in into Product development. Sealax has been in operation for the past 50 Years.2 Strategy statement . 2. Rebrand and register the Sealax Range of product to secure future Markets 2.0 MARKETING OBJECTIVES AND STRATEGY 2. Objective To introduce and obtain market leadership through a pioneering multi-surface sealant that is readily available and known to the Australian Market and new emergent markets and increase profits of Sealax by 600% within 12 Months from time of production of the multi-surface Sealant.Sealax has declined by thirty per cent in the past three years due to intense competition from larger sealers manufacturers often manufacturing better products at lower prices.

Ansoff’s Growth Matrix Existing Product Existing Target Market New Target Market Market Penetration Market Development New Product Product Development Diversification . to avoid potential risks such as go-error and drop error. The domestic market within Perth will be reclaimed and increased. a big win as the Company is a trusted partner who has supplied the market with good quality sealants for the last 50 years. According to Ansoff’s growth Matrix (diagram 1 below).In order to achieve this Objective/(s) Sealax will apply the following strategies. Market Strategy Sealax will adopt a multi – segment market strategy targeting 500. as a multi-surface sealant. the innovation will be patented in order to obtain and maintain technological market leadership over the next 12 months. a multi-level approach is recommended as the product is new and targets both the existing market and new markets with a key focus on product development and diversification. while also learning and reengineering along the way. Beyond Perth. To maintain this technological market lead. 3 multinationals with a global network will be contracted to market the sealant under license from Sealax. contractors and home builders. Potential risks of a go-error and a drop error are to be continuously addressed through an adequate and dynamic operational research model. Being a first entrant. a dynamic operational research model will accompany the production and marketing activities.000 houses within Perth comprising home owners. Product Positioning Strategy The Sealax brand is to be repositioned through rebranding and product diversification within the Perth Market.

Product name recommended is Max-Seal. single protective sealer for anything and everything. 3. The product will be designed with protective functions for various surfaces namely fabric. residence associations and schools and colleges. metal and various other outdoor and indoor items.1 Product Design and Development 3. The directions of use of the product will be printed on the containers. Furthermore. considering its capacity to cover maximum types of surfaces. the user friendliness and ease of using the product will also be assessed. p114 An aggressive personal marketing strategy will be adopted to excite uptake and command leadership in Perth and its environs. the personal marketing effort will be through professional associations of builder. Considering the nature of the sealant. 3.1 Product design Keeping in mind a product has to be specifically designed for home owners to perform the task of all in one. it will be designed in such a way that its containers will have twisting cover tops to ensure that the left over sealant. will tentatively be available in one litre trigger spray bottle for smaller surface area coverage and a four litre easy pour containers that can be used with ordinary spray bottles that will help cover large surface areas. the containers will be designed adopting the design of collapsible tubes which will ensure that the re-use of empty containers will not be possible. For effectiveness. that is a multipurpose product. Furthermore. can be used again at a later stage. home owners.2 Product Development . Max-seal.1.0 MARKETING MIX DEVELOPMENT 3.H. A warning of dos and don’ts should also to be included. “Strategies for diversification” Harvard Business Review 1957.I Ansoff. glass. if any. wood. This multipurpose product will aim at a target market being mostly of Australian home owners. manufacturing and expiry dates. together with the ingredients.1.

Due to the public’s lack of product knowledge of Sealax products. who are a ‘do it yourself’ kind of consumers. This means that other customers. Prior to penetration into the market. collecting customer feedback after a certain time frame. the marketing capability of the product will be tested. of course. A physical prototype of the product will then be created and tested by the chemical engineers under actual use conditions. however. physical distribution and customer service. it’s left with an excess capacity of 50. Almost every Australian household is affected from damage due to intense sun exposure that failed to protect fabric items. roof tilers. larger samples are recommended and feedback collected accordingly. This triggered an idea for developing a "single protective sealer for anything and everything". The competition being larger companies who have the advantage of providing cheaper products. Sealax needs to form a distribution strategy that will focus on its strengths as a small company. The process in between will be determined by the strategies to be implemented by a company. The intense competition from other larger sealer manufacturers did not make it better therefore Sealax needs to restructure its distribution strategies. landscapers and gardeners. For mass users like builders. This essay identified various distribution . Its speciality sealers are sold directly to the trade and are used by trades’ people. do not have access to Sealax products.000 litres and this will not be good for its financial bottom line. It is recommended to deliver samples of Max-Seal to randomly selected households to create awareness of the forthcoming product and. brick walls and roof tiles. not compromising its quality. bricklayers.2 Distribution Strategy The distribution situation at Sealax Distribution is mainly getting a product from point A to B. Sealax does not have an active distribution process.The sealer that has been produced by Sealax for the past fifty years only protected pavers. Westwood John (2006) states that distribution entails: marketing channels. instead it relies on regular trade customers since its inception. metal and outdoor furniture. The development of Max-Seal will thoroughly go through a rigorous screening process that involves identification at an early stage the costs and benefits of developing it that is the costs of developing the product should not exceed the benefits derived from its production. 3.

consumers.if the company chooses to use intermediaries.com. that a company needs to make before creating a distribution strategy: 1) channel length. Given that the product can easily be copied in two years. This is referred to as push strategy. contractors and homebuilders. The types of channel length Marketing channels.to – retailers.toconsumers and suppliers. They will be retailers to the consumers who are new to the product and therefore need. They will be licensed and well informed of the product. long and integrated channels. Sealax’s new product is one that does not need a lot of procedures to apply. who are. 2006) means how a company chooses to contact potential customers.versed home owners. www. 3.users needs so as to create a good distribution strategy. well.strategies and will elaborate on each and find the most appropriate for Sealax so as to gain a competitive advantage. as explained by (Westwood.1 Recommended Distribution Channel for Sealax Sealax will need to use an integrated type of channel. There are three distribution decisions. selective and exclusive.how many channels the product has to go through before it makes contact with the consumer. Sealax has an advantage of its product being known. state that a company needs to focus on its end. free support on . 3.2. 2) type of intermediaries. which comprises of suppliers.2. They will act as suppliers to the consumers who are already informed about the correct and proper use of sealant. Sealax does not have time for trial and error and this where the Push strategy proves efficient. advice on correct application. which kind will they be and 3) market coverage.marketingmo.will the company use intensive coverage. The channel lengths include: Direct marketing.2 Recommended Intermediaries for Sealax Sealax should form a reliable dealer network who will be the suppliers and retailers to the consumers. short. although they will need to choose the appropriate channel or channels so as to maximise on how fast and efficient the new product will reach its customers.

This is both cost effective and product efficient for the company and the customers will be satisfied and feel connected to Sealax. introductory price discounts and increased promotion can be used in the beginning but may only have a short term impact on sales due to the fact that the customers get used to obtaining regular discounts and this will no doubt increase . who will then be used to provide them with. but considering the most important factor which is the customer. However. and the stores should target the ‘do. The dealers will act as reliable local representatives to provide feedback from the customers. With its competitors often offering better products and/or lower prices.3 Recommended market coverage for Sealax As mentioned earlier.’ The dealers should target home builders and contractors through providing a discounted price as they will be buying wholesale. and to combat potential competitors from taking advantage of the market share. Sealax should patent its product . selective and exclusive. efficient after sales service.2. the customers need to be provided with relevant information so as to fully utilise it. For a more sustainable long term advantage. Sealax range of sealers have never been marketed for the past 10 years. intensive.Both internal and external factors affect the pricing of the product .It may initially be hard for the business.it. market coverage consists of. but even harder for its competitors to penetrate and take over its market share.3 PRICING STRATEGY Knowing the aggressiveness of marketing strategy that can develop a boost in promoting a new product. Since the product is easy to apply. Sealax has to come up with a pricing strategy such that its quality is not compromised and that it generates a profit making revenue. the coverage should be intensive. which should also be open to adjustments over time.yourself’ home owners who want readily available products. 3.guidance and post purchase service. 3. A dealer network distribution is also necessary because as much as the new product is easy to use. we should not ignore the fact that customers react almost immediately to the price . The new product namely ‘MAX-SEAL’ has to be priced in such a way that the price should be an indicator for quality assurance. The product should be sold through the dealers and other ‘home product stores. since the public does not know the brand.

however. advertising stimulates consumer demand which in turn can lead to price increase. restoring the original appearance of slightly faded objects and protecting them for a further 10 years and spraying on blue but drying clear in 30 minutes ensuring that the object is completely sealed with no missed areas.sales volume with very minimal profit margins. but. Consumers will be prepared to pay for such certainty and quality assurance.350 Expenses . 3. the assurance of quality to the customer may not be questioned. sometimes even leading to breakevens and selling at a loss.500 (150) 1.350 1. It can also be assumed that the potential buyers of Max-Seal will be willing to pay more for its quality after its user experience. Taking the above into consideration. The pricing decision of Max. Sealax will have to promote Max-Seal which may initially push up advertising costs and therefore the prices. consumers expect and are expected to pay more for more features because additional features and functions cost more to provide.seal obviously also depends on the target markets with different customer groups responding to price differently based on their ability or willingness to pay. Max-Seal has some unique features which include protection of objects from sun damage for up to 20 years.4 PROJECTED INCOME STATEMENT SEALAX LIMITED PROJECTED INCOME STATEMENT (FOR MAX-SEAL) FOR YEAR ENDING 20XX $’000 $000 Sales (W1) Direct Cost of production (W2) Contribution Licence fees (W4) Gross profit 1. Since Sealax is a well established firm for the past 50 years producing a range of sealers. Increased product knowledge reduces the risk of buying the wrong product.000 2.

5 Conclusion Sealax as Sealer producer has a lot of potential especially due to its new product which is “an all surfaces sealer.975 Workings W1 – Assuming selling price per litre of $30. reduce and learn from its weaknesses. 3.000 (50.000 Litres). storage and delivery expenses (W3) Sales representative Promotion costs Travelling costs Administrative overheads 30 200 20 50 75 (375) Net Profit 1.Packaging. develop its opportunities and ensure its threats do not ensue.000 litres x $3) W3 .Packaging.000 litres = $75. to when it is marketed and distributed to its consumers and the projected income from it.” The company should utilise the results of its SWOT Analysis to optimise its strengths.50 X 50.000 W2 – Cost of sales of $ 150. storage and delivery expenses $1. Therefore for 50. .000 W4 – Licence 3 Multinational Companies to produce and sale the Multi sealer at an additional premium of $ 5 Per litre sold (5 x 200.500. This marketing plan will enable Sealax to strategise on how the new sealer product will fare from the beginning (product design and development).000 litres a sales revenue of $1.

REFERENCE LIST Ascoff.com/strategic-planning/how-to-develop-your-distribution-channels/ Westwood.ecu.eblib. http://www. John “How to Write a Marketing Plan.aspx Category Business / Management.” Kogan Page.com. 2006.marketingmo. “Strategies for diversification” Harvard Business Review 1957. Literature . H. p114 http://www.I.au/patron/FullRecord.