CMI Case Analisys

Established in 1963, CMI is one of the country’s largest manufacturers of curled metal products. However, as doubts arose regarding the company’s ability to maintain its market dominance, it was imperative for CMI to diversify and expand its product offering. While integral to the operational and technical aspects of the industry, cushion pads were taken for granted as no substitutes were available. Damage from heat and shock, consistent down-time required for changing the pads, and potential health risks resulting from the use of asbestos pads provided an opportunity for the introduction of a more suitable alternative. CMI has indeed developed a suitable alternative m

CMI’s main marketing challenge will be to achieve acceptance of its pads by the pile hammer distributing/rental companies, who will view the potential time savings achieved by using CMI pads as a potential threat to their success. Increased pile driving efficiency ultimately results in less revenue for the rental outlets, as contractors will rent equipment for shorter time intervals than they had in the past. In an effort to include this segment, CMI must stress the reduced machine wear and tear and low carrying costs associated with pad durability. In addition, CMI must address this challenge by promoting its pads to the main buying influences within the industry. As awareness and acceptance of the curled metal pads increases, usage will eventually become an industry standard, thereby forcing rental companies to stock them as a means of meeting customer demand.

Prior to setting a price for CMI’s cushion pads, it was necessary to determine the product’s intrinsic value to customers by conducting an Economic Value Analysis (EVA). Using the results from the Colerick and Fazio tests both time and cost savings were determined, presuming contractors will be renting equipment for each job. The first step in this process involves identifying the Reference Value, which is the price per unit of the next best alternative, i.e. asbestos pads. Reference values for the Colerick and Fazio jobs were $166.40 and $400.80, respectively. Positive Differentiation Values of $219.33 and $639.20 were calculated for the Colerick and Fazio tests, respectively. Neither test proposed any negative value as a result of using CMI’s pads. Therefore, the total economic values of CMI’s pads were $$385.73 for the Colerick job and $1040.00 for the Fazio job. (For detailed calculations and results of the EVA, please refer to Appendix I). It is critical to set a price and develop a marketing plan that communicates and guarantees the value-adding incentives of CMI’s pads while ensuring profitability for CMI.

Within the current market, existing distribution channels for cushion pads include hammer manufactures, rental outlets, and supply houses. Smaller channels such as pile manufacturers, with lower turnover, also exist but will not be targeted in CMI’s initial product launch. Due to the perceived insignificance of the pads in the current market, no direct selling or distribution outlets were necessary. The launch of CMI’s curled metal pad, however, will necessitate restructuring of existing distribution channels to facilitate in

Some topics in this essay:
Appendix IV, Colerick Fazio, Objective Established, Distribution Channels, Purchase Influencers, Conclusion Asbestos, Marketing Marketing, Professor McCormack, Industries’ CMI, Pricing Pricing, curled metal, curled metal pads, metal pads, cost savings, cmi’s pads, pile driving, cushion pads, product launch, cushion pad, pile hammer, colerick fazio, cmi’s curled metal, pile driving contractors, existing distribution channels, jacko consulting inc,