Case Study:

Canty International

Main Event, Facts & Characters

Request for proposal received from Bryants Inns (Diana Cromwell) to Bob Sweeney

Requested a substitute to replace wall

coverings(vinyl/paper based)

Purchasing agent’s requirements:

Attractive

Fire resistantPass safety requirementsCompetitive in price(high

value)Sound proofDurable

Facts on product produced

Techno-Fibre coverLightweight sturdy bamboo fibre core

Highly:--abrasion resistant, soil proof--Low maintenance, fire resistant, sound proofing

Estimated 10 year value

*All products are produced upon customers designated orders

How can Canty International establish the value that Decoline will contribute to the industrial and commercial industry consumers?

Problem

Numbers Breakdown

Break-Even Point = $24.75

At 500 m₂

Fixed Costs

Variable Costs

Canty International is well established

No other products in the market are like Decoline

Canty International has the funds to develop Decoline

No other company has the advantage of a design lab

Assumptions

We assume:

Competitive Analysis

Decoline doesn’t have any direct competition but they have a lot of competitors that offer similar style

products

Decoline lasts 5 times longer than the current products on the market

SWOT Analysis

Strengths: The design lab allows

the company to produce a product that completely meets the customer’s request.

Making a greater profit due to the supply of high quality materials at minimum cost

Weaknesses: Not meeting current

capacity restrictions Problems at any area

of production may delay the process of making a product

SWOT Analysis

Opportunities: Many growth

opportunities because of the design lab

Threats: Losing market shares

if their products don’t equal or surpass their competitors’ products

•HOTELS•HOSPITALS•RESTAURANTS•RETIREMENT COMMUNITIES

Target Market

Hospitality and Service Industries

Focus on North

America

Alternative #1: Price Skimming

Canty International will set high price for Decoline initially to maximize revenues

AdvantagesHigh price equates to high qualityHigh price will limit demand giving time to build

production capacitiesBetter to price too high than too low

Alternative #1: Price Skimming

DisadvantagesCompetitors may enter the market with a lower

priceCompany may have high unit costs associated

with small volume productionsWhen the price drops past customers may feel

cheated

Alternative # 2: Market Penetration

Initially set the price low to attract more consumers

AdvantagesLow price will build sales, market share, and

profits quicklyAs sales grow, costs drop, which causes the price

to dropDiscourages competitors because the profit

margin is low

Alternative # 2: Market Penetration

DisadvantagesLower price will cause larger volumes, which

may cause the company difficulty to keep up with demand

Consumers may believe low price means low quality product

Company will have a hard time increasing selling price later

Alternative # 3: Value-based

Decoline is prices to match Customer’s value perception

AdvantagesHigher the value perception, higher the salesDonation to charity increases company’s imageDecoline will perceived as prestigious, because of

their high prices

Alternative # 3: Value-based

DisadvantagesConsumer research implementation costsIf consumer’s value perception of Decoline

decrease, less products are soldValue of products depends on how consumers

view them

Solution

?Price

Skimming

Price will be set at $49.50 to get 100% markup

Implementation plan

Price is set at $30.99 to get 25% in markup

Plan B

Break-Even Analysis Fixed costs Variable costs Break-even point

Pricing strategies Cost-based Competitor-based Value-based

Course

Concepts:Monopolistic competition

Price Skimming

RFT requested for a product with certain specifications.

Current products in the market don’t measure up to Decoline.

Canty International is world renowned and that helps launch a new product into the market.

Key Findings

Bibliography

Case reference materials: Marketing, Canadian edition• Dhruv Grewal, Michael Levy, Ajax Persaud and

Shirley Lichti; McGraw-Hill Ryerson, 2009

Credits

Created by Group B

Sayali DeshmukhAman Dhaliwal

Kai Min (Leo) HuangLeslie McCollumBrittany PetersenEmily SandhackColin Williams