Rubbertech Case Study
{draw:frame} NCCB503 – MBQC831 Marketing Doug Stayman Rubbertech Case 10/17/09 Order of files: Additional Comments: {draw:frame} Executive Summary Siam Cement’s offer to purchase an initial order of 200 units at $9,000 per unit, would lead to a net profit of $200,000. While this immediate cash influx may seem advantageous in the short term, it will not offset yearly operational expenses of $250,000 (See Exhibit 1). Additionally, accepting Siam Cement’s offer would position Rubbertech as an Original Equipment Manufacturer (OEM). This decision could impede potential growth that would far exceed the offer that is currently on the table. If Rubbertech does not accept Siam Cement’s offer, they can seize a part of $5.4 million total market share (Eisenstein 2006). In this case, the potential for reward clearly justifies the risk involved. The recommended marketing strategy for Rubbertech is illustrated at a high level below. New Product Introduction {text:list-item} {text:list-item} {text:list-item} Life Cycle Engagement Strategy {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} Target Market Currently, 90% of RSS production occurs within Thailand. Therefore, it would be prudent for Rubbertech to begin their marketing efforts within Thailand. The company can infiltrate more of the total market share for the industry and increase their contribution margin by eliminating the added $1,000 cost attributed to transportation outside of Thailand(Eisenstein 2006). Since Rubbertech is a Thai company, targeting the Thailand first will be an easier transition from a relationship building perspective; they will not need to devote time or resources toward breaking cultural barriers, and can focus on promoting their value proposition. Additionally, Rubbertech has no direct competitors, except manual labor and an Indian company with burgeoning technology
Cited: Eisenstein, Eric and Scott Ward. Rubbertech. The Wharton School, 2006. Gourville, John T., _Notes on Behavioral Pricing._ Harvard Business School, 1999. Stayman, Doug. Marketing Slides, Sessions 4 and 5. Cornell-Queens Executive MBA Program, 2009.