Case over view

Lena
Case analysis S. W. O. T of
PINTURA CORPORATION CASE Pintura
STUDY

Objective &Strategy

Solutions from Kalyanchakravarthi Revenue forecast

Cannibalization potential of “Lena”
to “IFG”

IIMK e-MDP MSM(IV) 2021-22

 Case over view
 Pintura Corporation is considering the launch of the environmentally
friendly, high performance powder based hardwood coating, called as
Lena.
 Industrial Finishes Group (IFG) needs to develop a business case for
the product and determine, the segmentation, targeting, positioning
and the marketing mix strategy for Lena with accurate forecasts for the
next five years.
The product launch team had to convince their review team that the launch of
the new product would increase the sales of the IFG division by 5% annual
growth rate. Therefore, a detailed analysis needs to be performed of all these
issues and a final product launch strategy and business case needs to be
developed for Lena. Concerns were raised on the profitability of Lena.
Case analysis
The IFG division of the company contributed to 25% of the total sales of
Pintura Corporation and it sold the coatings, paints and the related products
to the commercial and industrial customers..
IFG’s Objectives and Strategy
 Definitely the objective of the IFG to enhance the revenue by5%
annual growth rate.
 Another objective is to move to environmental friendly products.
 Strategy :
 The strategy of IFG should be capitalize the customer’s shift and
develop environmental technical products and move along with the
trend.
 The strategy needs to review the feasibility and make marketing
strategies to make the product lucrative for the consumers
 The marketing strategy could be including stage gate. i.e activities
and decision points.
 The marketing strategy should be Segmentation,
product branding, price, channels of distribution
and communication.

IFG division had grown the revenue share to 47% from wood coatings to
water coatings.

The company was also considering the cannibalization with the existing
product and feasibility
IIMK e-MDP MSM(IV) 2021-22
 Certain important numbers in relation with case study
o Total market revenue in the US is : $27billion annually
o Global market potential for General Industrial coatings(GIC) : $24 billion annually
“Lena”
o US market share in GIC coatings : 25% of $24 billion which =$ 6 billion annually
o Annual revenue of Pintura Corporation : $4 billion i.e 15% of $27 billion
o Revenue share of Industrial Finished Group(IFG) of Pintura corporation is 25% i.e. 25% of $4bill=$1billion
o Revenue share of Consumer products Group(CPG) of pintura “Corporn” is 35% i.e 35% of $4bil=$1.4bill
o Revenue share of International Division (PI) is 40% i.e 40% of $4billion=$1.6 billion

o Customer segmentation of IFG. Wood coating including furniture 30%, flooring 25%, cabinetry 20%, and others 25%
o Estimated % of cannibalization of sales from solvent based to powder based 20%. Segment : flooring and cabinetry.
o Estimated % of cannibalization of sales from solvent to powder based 60%. Segment: furniture & other wood products.
o Estimated incremental sale to furniture & other wood products 5% and 1% to flooring & cabinetry custom
o Price of solvent based wood coating : $28 per unit. Cost of goods sold $14.28
o Estimated waste 12%-30%. Average waste for forecasting purpose : 20%
o Price of water based wood coating $34 per unit. Cost of goods sold $21.08. Avg waste : 18%

IIMK e-MDP MSM(IV) 2021-22

 Certain important numbers in relation with case study
1. Channels of distribution – It is being proposed that Lena would a profitable product therefore could be sold
directly to manufacturers through the in-house sales force and indirectly through a network of independent
distributors. Distributors account for 51% of all sales from wood coatings, with flooring (65%0 and “Lena”
cabinetry customers (70%) but they charged 21% selling and fulfilment fee for IFG’s products.
2. Communications – The team has forecasted $2 million for first 12 months and $1 million for the next 12
months. The overall goal is to meet or exceed the sales forecasts by the end of the year. The allocations are
as follows Sales force ($500,000), Distributor ($700,000), Advertising ($600,000), Publicity ($500,000) and
Electronic Media ($700,000).
3. Lopez has decided to price Lena at $38/unit and COGS of $22.04.

IIMK e-MDP MSM(IV) 2021-22


 Strong successful product portfolio
 Ability to make environmental friendly
products as per the regulations
with innovation & advance technology.
 Lena does not omit “volatile organic
compound” ( VOC)
 Lena products are much durable and translates
a very few defects
o Huge market potential $130 billion
annually(Globally) and $27 Bill in US
o Raising demand for powder based 10%
annually.
o Launching “Lena” would give IFG 1 moverst
advantage as the product is unique patented
formula
W  Lack of confidence by Sr. team on profitability
S of “Lena”
 “Lena” products consume high material cost,
high equipment cost and needs high training
cost
 Limited market share
SWOT
 “Lena” Could cannibalize the existing product
revenues & profitability is the ‘Q’
 If the product fails when it is applied could result
in permanent damage
 Un certainty and volatility of world markets
 Increase of competition from overseas
T
manufacturers
 Since “Lena” is proposed to be priced $38 a unit
there could be a resistance from the market
IIMK e-MDP MSM(IV) 2021-22