Rubbertech Case Study Rp

Decent Essays
Intro RubberTech’s beta tests of RubberTech Purifier (RTP) reveal it to be an impressive and cost effective product. However, before launching RTP, RubberTech must develop a complete marketing strategy for the product. RT must also ensure profitability over the next two years as investors are due their returns.
Thirty Thousand Foot View RT must assess the needs and desires of its customer. Current means of RSS processing are inefficient. This inefficiency results in a lack of standardized work. Plantations require consistency in the work force, standardization and efficiency of labor. RT’s machine meets the needs and desires of its customer. RTP utilizes computer processing, as well as additional technologies to offer consistent and efficient
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The costs that RT incurs are its annual operations, the annual tradeshow, COGS and potential advertising. RT does not have any direct competition. Its closest competitor is from India. However, this competitor’s product is not as efficient when comparing labor costs and output between the two. RT’s most significant competition is the traditional means of purifying rubber in the RSS industry.
Ten Thousand Foot View We recommend that RT segment its product by plantation size. RT should consider the productivity and output per plantation of each segment. The large and medium plantations account for 65% of the output for the industry. Large plantations produce 60,000 tons/year, while medium plantations produce 35,000 tons/year. A single RTP outputs 5,000 tons/year. Therefore, large and medium plantations will require 12 and 7 units per year respectively. If RT achieves a 12% market share in the first year, this will result in the sale of 312 units. Small plantations on average produce 3,500
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While feedback from the tradeshow was puzzling, beta tests have revealed the product to be one that works in the field. The pricing of RTP should be improved upon. We recommend that RT price discriminate between its segments. RT can do this because it has market power, it is able to clearly identify groups of customers and it can justify this discrimination by use of a volume discount. We recommend that during year one, RT sell its product to medium plantations at $15,000 a unit and large plantations, $10,000 a unit. Large plantations receive this discounted price because of the volume of machines they are purchasing. At a starting price of $15,000/unit for seven total units, we recommend a reduction of $1,000 for every additional machine bought. Large plantations require 12 units; therefore they will receive a discounted price of $10,000 per unit. After year one, with 12% market share, these prices will yield approximately a $512,000 net profit. In year two, we will continue our promotion to our segments at an annual cost of $50,000. Additionally, we will transfer customer accounts from salesmen to tech representatives. We also recommend a decrease in price to medium plantations from $15,000 to $14,000. Continuation of promotion, previous success of our product and reduction of price, should result in increased market share. At 15% market share, the profit for RT will be

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