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    Cumberland Case Study Solution

    Uploaded by

    Pranay Singh Raghuvanshi
    1. The document discusses pricing for Cumberland Case Study's curled metal pads. It recommends pricing the pads between $1000-4000 initially to balance costs of manufacturing that range from $444-1920 per pad size. This price range allows Cumberland to realize the $7520 in estimated cost savings per pad based on reduced driving and changing time. 2. The market for cushion pads was previously unorganized with no major players. There is an estimated market size of 19,500-26,000 hammers where the pads can be used. This represents an opportunity for Cumberland to become a market leader by promoting the pads to hammer suppliers/renters, construction industry conferences, and engineers who influence large firms. 3

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    Cumberland Case Study Solution

    Uploaded by

    Pranay Singh Raghuvanshi
    1K views2 pages
    1. The document discusses pricing for Cumberland Case Study's curled metal pads. It recommends pricing the pads between $1000-4000 initially to balance costs of manufacturing that range from $444-1920 per pad size. This price range allows Cumberland to realize the $7520 in estimated cost savings per pad based on reduced driving and changing time. 2. The market for cushion pads was previously unorganized with no major players. There is an estimated market size of 19,500-26,000 hammers where the pads can be used. This represents an opportunity for Cumberland to become a market leader by promoting the pads to hammer suppliers/renters, construction industry conferences, and engineers who influence large firms. 3

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    1. The document discusses pricing for Cumberland Case Study's curled metal pads. It recommends pricing the pads between $1000-4000 initially to balance costs of manufacturing that range from $444-1920 per pad size. This price range allows Cumberland to realize the $7520 in estimated cost savings per pad based on reduced driving and changing time. 2. The market for cushion pads was previously unorganized with no major players. There is an estimated market size of 19,500-26,000 hammers where the pads can be used. This represents an opportunity for Cumberland to become a market leader by promoting the pads to hammer suppliers/renters, construction industry conferences, and engineers who influence large firms. 3

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    Cumberland Case Study Solution

    Uploaded by

    Pranay Singh Raghuvanshi
    1. The document discusses pricing for Cumberland Case Study's curled metal pads. It recommends pricing the pads between $1000-4000 initially to balance costs of manufacturing that range from $444-1920 per pad size. This price range allows Cumberland to realize the $7520 in estimated cost savings per pad based on reduced driving and changing time. 2. The market for cushion pads was previously unorganized with no major players. There is an estimated market size of 19,500-26,000 hammers where the pads can be used. This represents an opportunity for Cumberland to become a market leader by promoting the pads to hammer suppliers/renters, construction industry conferences, and engineers who influence large firms. 3

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Cumberland Case Study Solution

    Group B03
    Pricing

    1. What’s your price for the curled metal pads? Why?


    Ans. When calculating the value of Curled Metal Inc.’s new cushion pads to the
    customers one has to take a variety of factors into account. These are the total costs per
    hour of pile driving, the saved costs for driving as well as the savings in changing time. By
    calculating the total amount of money saved when applying the new pads, one can
    calculate the “real value” of the product.
    Costs of manufacturing vary from $444 to $1920 for larger sizes, thus price needs to be
    balanced accordingly.
    Cost Savings are as follows:

    If the reports from Professor McCormack proved the same assumptions in savings of time
    can lead value realisation of $7520
    Keeping these calculations under consideration, CMI can charge in the range of $3000 to
    $4000 per pad if it would want to skim the market initially on account of its cost savings
    and then reduce the price later.
    Or it can charge somewhere around $1000 to gain a better market share straightaway.
    2. How big is the market? What kind of opportunity does it give us?
    Ans. According to the Construction Engineering magazine report; there were 13000
    hammers owned currently in addition to the range of leased hammers of 6500-13000
    which took the estimated total of functioning hammers in the industry to 19500-26000
    hammers. The hammers were designed to be used for 30 hours per week and 20 feet per
    hour considering the time to change the pads which amounted to 290-390 Mn
    feet/annum. Set of curled metal would work for 10000 hours. The market for cushion
    pads was quite unorganised when CMI got involved into it. Most of the cushion pads
    were unbranded and paid very little attention to. There were no major players in the
    cushion pad market; which provided CMI with the unique opportunity to CMI to position
    its product and become a potential market leader due to the various advantages over the
    current available pads. In order to promote the CMI metal cushion pad; the company on
    3 major influencers. Firstly, pile hammer distributing or renting companies as they had a
    significant influence over the as they were the suppliers and hence in the direct contact
    of the construction company. Second was the promotion in the ‘Piletalk’ seminar headed
    by one of the industry suppliers held in various cities hosting designers, contractors and
    equipment developers. Thirdly, was through Professor R. Stephen whose work on pile
    driving was highly regarded and referred to by big construction firms.

    3. What are you going to say to Colerick Foundation?


    Ans. Since CMI pads reduce the need to replace cushion pads, if CMI is successful, competitors
    will see a huge reduction in their market share. In the time it takes to change the pads alone,
    contractors save 10 hours of labor each year by using CMI pads instead of Asbestos . With labor
    prices, this saves contractors $9,747 per year (Figure 2B). Pad makers are not well known, so
    consumer loyalty is likely very weak. With all of CMI benefits from the project tests, contractors’
    willingness to pay and change brands should be very high. Colerick Foundation Company’s
    eagerness after experiencing CMI pads’ benefits, was a prime example. If other companies and
    contractors are comparable to Choleric Foundation, then to get the pads into the market, CMI
    just needs communicate the benefits of the pads to the consumers.

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