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Marketing Plastic Resins

We school Exec PGDM 2010-11

Plastic Market History




To find a substitute for ivory in billiard balls In late19th century, the game became so popular that hundreds of elephants were killed In 1866, John Wesley Hyatt discovered celluloid

Plastic Manufacturers


Industry channel of Plastic component

Captive Facilities
Produce plastic parts strictly for the manufacturer Large scale production

Custom Molders
Produce plastic parts as designed and specified by the manufacturer Independent small businesses

Types of Plastics


Commodity Plastics
Used for packaging, throw-away items, toys Inexpensive, in mature phase of PLC Little brand loyalty exists, attention paid to price and availability Ex: Detergents bottles ( Polyethylene), throwaway cups ( Polystyrene)

Engineering Plastics
Used to perform mechanical or structural functions, meet durability and safety standards Most of them in the growth stage of PLC Ex: Computer cases ( Polycarbonate), plastic gears (Nylon)

Purchasing Habits


Plastic materials purchased


Captive molding facilities ( voluminous purchase) Custom molders ( small, different material purchase)

Quantity- scaled pricing polices


40,000 pounds purchase known as Truckload (TL) 50 1000 pounds purchase known as less-thantruckload (LTL)

General Electric
 

Engineering plastic supplier Implemented value-added strategy


Replace costly materials( Ex: Metals) Inform and educated end-user (customer)
 

Advantages of engineering plastic Assist in plastic component design, development and production

GE Sales Approach


Field Market Development (FMD)


Relationship builders
  

Plastic specifiers Buying centers End users Design and development of products Update on new product development and techniques

Assist for
 

Field Sellers (FS)


Direct sales to custom molders Purchasing influences at captive molders

CHANGING ENVIRONMENT
Energy crisis of 1970s  Small molders faced problem in getting raw material  Little flexibility to find alternatives  Lexan500 or equivalent  Development of internal standards


Borg Warner Sales Approach




Medium and small sized customers


Plastic Service centers for LTL Approached other plastic companies whose product types did not compete with it own to use PSC

Large customers
Direct sales force for major companies

Focus Of BW Channel
One-stop, efficient and cost-effective shop
Standard packaging Standard quantity-scaled prices
    

Independent, nationwide distribution network Quick, effective inventory delivery Eliminates inventory storage Assistance in emergencies, technical advice Free-up field resources for market development

Focus Of GE Channel
  

Direct sales force Elimination of middleman Field marketing team assisted on


Molders growth, demand capacity New application

   

JIT delivery systems Special facility for small orders Pre-sales, post-sales and technical support Centralized customer service

Why BW is better?
   

Channel designed as per target market Wider, uninterrupted distribution channel Cost-effective approach Pitfalls in GE approach
Single point service provision Expensive Accumulation of inventory

Thank You