Pintura Corporation: The Lena Launch Decision

Problem:
The current industry trends and financial analysis indicated increased demand towards
environmentally friendly products from consumer side. In that context Pintura Corporation
decide to launch a new product Lena, a high-performance based environmentally friendly
product. There were concerns about product feasibility and concern for the cannibalization of the
existing products of the company. There was also concern for the Product Launch Team to
convince the review team that the new product Lena could meet the IFG sales objectiveof 5%
annual growth and to decide on ideas for marketing mix.
Along with this there existed problem in to determine which customers to pursue i.e.
segmentation of customers. In addition to the issue of product cannibalization there was also
about the extent to which Lena should emphasize Pintura’s brand name. Pricing and deciding the
channels of distribution was another aspect the company had problem in deciding.
Analysis of the situation and the problem
The segments for Lena, which is a powder-based coating product for hardwoods, are Furniture,
Flooring, Cabinetry and Other wood products.

Criterion Analysis
Measurable Each of the above segments that is furniture, flooring, cabinetry and other
woods are quantifiable through volume by sales and contribution to firms
($15.96) is established here.
Accessible Using the existing hybrid channel of distribution (i.e. in house sales force
and independent distributors), which is currently being used for liquid-based
costings, Lena can be marketed to all the segments indicating that segments
are accessible.
Differences Flooring and cabinetry customers focus on cost leadership and production
efficiencies whereas furniture and other wood products emphasize on
product differentiation.
Substantial As per the Lopez’s estimates, in the flooring and cabinetry segment, 20% of
the IFG’s total sales to this segment would convert from liquid-based to
powder based coating. For the furniture and other wood segment, 60% of
customers can switch from water-based to powder-based and 40% can
switch from solvent-based to powder-based coating products. These figures
indicate that these segments can be substantial for Lena.
Compatible Since the demand for more environment friendly products is rising, it can be
fulfilled by Lena, a powder-based coating product.
Responsive In the market research survey, it was evident that buyers’ interest in
purchasing Lena was enormously favorable and Lopez had estimated a 5%
increase and 1% increase in sales to furniture and other wood products and
1% increase in sales to flooring and cabinetry customers. Thus, this indicates
that the segments are responsive.
Problem Analysis:
There was apprehension about new product development, so the manager even went to the extent
of conducting market research to confirm the product offering matched the customer
requirements.There were concerns from the Product Branding point of view as any error in
application and processing might result in increased chances of product failure. While deciding
the price, the waste generated also had to be considered as this increased the overall cost. With
respect to channel of distribution, using hybrid channel i.e. mix of direct and indirect network of
distributors but the distributors charged 21 % selling and fulfillment fee.