KONE: The MonoSpace® Launch in Germany Dax Neryonda 0 Gordon Sorts In Novenber 1996 Reisno Hit, dzeceor of KONE Autzags new levator busi "Seminole eet in pas The nei ean rch et eteeeet thee eemed tar ngionenie construc ‘Son sla andl diferenintn among compettivefferigs had ed icant ice compen and margin exsin inthe ins Peetn frm out ofthe comnnodiy ot Hats and other KONE managers ‘were adkngtn the company’s newest, evoltonary product, MonaSpace. Aho ows of he Monapace prac ad inal ed hm exch co is elleagus, "tin is we can conquer the Geran enasket! ealy test market and product launch ren had given Has ase fr concer, "Ws Hats wondered, waste ie of he MonoSce opportunity in Germany? How shad be pice and postion MSpace? To wht extene mig Monospace donatne es of KONE existing lewesve levers? What wou be needed more asuocessl Inch? With more questions than answers before hi, Hath began oceiew bi opns, Sin ion nthe ate 1970s and 1980s found he workiwale elevator indy “in the ently 1990s by five companics Senger in heir domestic or regional makes Tesh and Hitch of Japan sod Gott of Korea wee import competitors the fst growing Asan market en tan ns rn i Sansa a rt Tem etal ects na eran ep ng ews bantepemn oneONE: The Msp Lenin Gary ave 1 Ot Founded in 153, Oui» wholy ovued subsidiary ofthe United Tetnoogies Cor potton, wash glabal mare she leader in he manufrs, and sevice of learn 1795 sold ore han 3000) eleators nd ha 730,00 ender maine ance contrac: Otis employed 68,00 people worlwide in 17 production wats nd tote tan 6 sales often 4 counties Revenue for 199 were $5.3 billion, up 145 fom $4.6 blo in 1954 a is $511 milion, wp 21% fom $121 Dascunons oF KONE Maio Gioeat Co compary vested approximately 1.6% of anil rev ‘hein R&D (is ws dminant in Europe, the United Stats, and Canal wit market sare in hese regio close wo 30% fer marke share ia Aca was apron 70%. The onan’ xgesve,new-masket entry aatgy had ade the at eign er ‘or company inthe emergag market of vn and Eastern Europe Schindler ‘The Swiss engineering fm Schindler was ranked second in glabal levator sles Manufacture an ale of eros and eels counted for 7% ofthe Sehr Group's 1995 revenues. Service accounted fr % of thee revenes reflecting the company shift during the 1990s from equipment sles to service. Although Schindler's toa revenues had been Hatin 1994 and 195, approximately SP? bilion (4.0 ban in both years, 1995 ater tx proof S78 million 97 rion) were only onehaf cove of 194. Mos of Schindler's 20 praction Ses {in 15 Baropean cours ha been converted fom mantacturng to sen. The ompany abo operated more than 3 sls, maintenance and ntl facts in enuntdes ‘Schindler’ expesed seatgy was to exp psiton in elevators and esa ‘ors and achew an egal marke pit among ie opetaions in Harpe, Amerie, ad ‘AsinPaciic he ater marke rogng snares grow plan Sener prot ‘sey was tomainan ts margins ove volume ad, ota vod pice ws, Mitsubishi Bleee In 1995, 60 yeas after i began producing clerators, Mitsubishi Eletre was spas eg levator manofscener,conrellng more an 36% ofthe Jepsnese ‘market, Turnover in 1995 was 2782 billion (5278 tillion), operating pte ETT bilion (51. bin) Revenue broke down among the company’s ve divisions ns flows: Consumer Proiets, 2% Data Proce, 21%; Semieonductos, 20% Tada Equipment and Automation, 18% end Hey Here, inling elev tor extalatrs conveyors, and transformers, 24%, Pasulty aggresive Aas, ‘Mitsubishi was the mathe leader many Asan markets In 1996 k opened new ‘Asian factory, doubled production into exiting Asian fctvies, se lunch ‘vo jint vente (eines)(Care KONE: Te Manse Lene Geny SL AHHOIT | Bn Descwnins oF KONE Mio Grow Coureoxs (commu) “Thy “Thyssen Auge he worlds ith ages elevator manuficere, was owned by Thyssen AG (1995 nets of DM 10 billion (871 billion). Thyssen Auaige’s 1095 reves were DM2? billion (5 bile), up 5.2% fom 1994 A decent ‘ned opcatio it seve exercised consider stanouy ver prodet ranges {ned sce, Thyssen Anfuge mantel only is mos suatexe components, a Sourcing al others. Strong Earop, wit rater than 15% marketshare 1995, ‘bt weak in loth and South Americ, with snere 2%, the company was investing erly ini having sablichedmanfactoing ites in China snd sales oes in Chin and Kore, [Nambrs and pes of eleatrs sold varied! dramatically across the globe (se “Table telecting for such as rtwitaton, population deny, nd goveenment supp fo pbc hous. "The cator indy inne wis tana splint wo seins: new guip- ‘ment and src that counted fr aprosimaay Sil nd S13 bilo ingot tals 198, "The tition separation of proce and sevice had generated ineesting com tive dmc in the cleratorindsty. Compatiion for new elevtrinstalations tres fre lading to new elevator equipment ten being soldat or below cst by The large cmpeitors.Competion fc elestr serie contacto he other hand, tra tadsaly nore order Equipment suppliers usual al an adantge in wi Ting coonets to eve her installed aes. By tcc agreement elevator companies ‘rattan high agin cr anna eve contracts dat were oughly equa 9% tthe prehace pie ofan levator Tv ery baits de tothe relatirely simple eletro-meshanicalechnology, steady denand and high margin the service maehet had rece ateaced any ‘new comprar Thee included sna, loc service-only providers ar often enjoyed ‘TABLEA | Esmanren Dean ey Reon for 1996 (ms) Resend Other _____imcrte”_Lowise Mise _ighise_Toul oropeMitletam, 650006500 000s) 7goN mt Nothin 1800010500 goo 0a oo0 ‘Asvani Aven Sop 109020400100" 9000 ‘Tal hac 2904000 2000208000 Chen Berar fend Boe >amp00 +NONE: Te Lh in Gray sn adranag over the big manufsctresin terms of pice, proximity and sped to Servic, nota fctor inthe award farce ctr. Despite tis end, the large equipment supplier: had concn todo wll given thet approximately 0% of service contracts ill fowed atomatclly fom sew equipment ses However, ‘here was some doubt that thi seaton wold lst fr very Tong given the caren Elovator Technology Elevator technology varied data with pet otavel gh, waveling ped ee ee Deve mechanisms "The primary elevator die technologies were els (high speci o gered medium sped) wacion als elle or rope’) an yal. Sales Up ype sft osgiicant ations by repon and country, were 10% for gear. es 408 for geared traction, and 60% for hyde Gs Patan certs sed Priel in commercial bung, emplayed lange low-speed cece motor one arth eS recor aad eld be pried Esch idea eestor shat some levator constants considered tobe a poset i performance characteris and coat/benefc analy, hyde so rare lear for hgh pray in mid and low-rise, Tot ocasonlly in igh-rse, bldg. Machine rom requirements ‘The appendage shape of machine rooms a in tale component of elevator construction, made them difcl and coy oie {gate ine many buildings Tey iter cecupied penal see bli pace in a ctor may ch tng tlre od ane tenn i? the won machine eon ater iS rte mci vy aed on the of sore the ha, ranged na ts ere et per deve Gave toon coe ‘Sctchnstoas weraged type set ps rr and evel ts acd piesa hnetarea saline oe we ataiase oe PD), The next most common locaton, on the IwestRoor nest othe sf (eed PU), was generally more expensive becuse of more comple oping aragement(Cate KONE, The Map Loc Camany 518 rqwort2_|_Euvaron Mace Rud Conncnanions irt tac ae a ee nk a oe I sl placed on he lmest for wihin 10 meter: of he sat "Toul lertor est mas ughi halequpmnt and hal extn of the sa and chine oom an installs 0 The Elevator Purchasing Decision “The compe of elevator purchase deckons varied with balding eye and desig, Generate tale, cnir ad wor complex buding, nd tha he levator se {em te lags the numberof peopl involve in the decision and fctos to be em sidered, Sdettion af a highrite commercial bulding devatae astm, for exe, Soman Freon Fom hel tom ig involved thronghest Reesy one, consrtion company mar See, construction empany parc get, and bling sere manages, "cme mle ye oon bie i ie eee cdS04 Case ROME: Theospn® Led in Gray TKONE (jronounced Ane and meaning “machine” in Finnish) was exablished ‘1910, Originally foowed on the ep and sal of rebull eleteeel motors ‘apanded ts busines sts over the years oinlde the manaaeure and sale ‘ot tel, maritime equipment canes, wood handling ystems, and clinches Seri taitesne esl 90 TD RE RRAARA. 19° LO rome ro an Seat ree rte ul sevice conta for 425,000 ons VI account for 538%, V2 br 62% ofthese revenues, Within V2, mintenance contests accounted for of evens, modeniation of exiting elevator for 12%. (Ex presents KONE’ epniatioal hart Exit smmarizes the Sania) KONE manure dsl broad ine of eqsgmen,nhdng standard Jow sve seg eto met ie elestor yen, high-rise elewtor systems, ‘een let hospital eatrs, eight elevator, exaltos and awa. ad cle- ‘or components oe Eahibt sor eneples of KONE proves) of KON s equipment sles wel. 10 1993 KONE spent spray 29% ol Toenser mn sev pod feclopment ‘With 30% of sles outside Finland, KONE opersted wo headquarters one a ERB = oer esa in 1995 wee 58% EU 43 resto rover 27% North Ames TO Acs and Australia and oer counties. KONE Auf SS aa ee SS ee eee ee eee | a ee oe eee ee = ate pe aac ce SS cee ne NEE ee ccc ab, Co caahe beh atSeea get cies nue ae Sa een eee aren Te eeepc See ae ee eee aS fei oeeepir epee trmiprry Se ee ea pee eee Se eT et rc ae wes TOS pa eaerae permet Ee ge eee ee Li alee | i itl tort fete T= oT i lair ail fet|/H4]| I — # il . : Hyon all 5 | : rz Eyl Lg] Hes] aba fy i iid Pe Uae 3 i Br | [#8 : i a 3 3 a zl i : i |56 Caco KONE Te MaSp® Lene i Gormany etuar4 | KONE! tis 191—1995 te muss oo a Hone tes = ‘ype PT; DM 80,00 for action type PU; and DME 120,000-DM 200,00 for uae- ‘on ype PS.? KONE's lesson new equipment sls averaged pproninately 8% of ‘esr iyi and rooghly 5% of ls for taco lento EME Aconsncaliy viable, machine role elevator had lang been compelling noon to levator manufacturers, sit would yield signiiean adiinal usable space fr evenwe-gnertng purposes, and greater architectural feed, se ‘lke compare geared wacton systems, thet required garter, KONE ne machine the "EcoDise,”contlled speed by varying the frequency of erasing ater soplied w the toto, was comnany done in modern igh spel geal pews eet a arate meant er eat “isis ‘The need for amachine om ws eiinited by placing the BeoDie“TABLE® | KONE Avraue Suusony Fmancits (Funes DM 1,000) 009%) “ta 02%) nna ito 055%) 2438 154 ease “300 03%) niet 1986 (161%)KONE: he MoaSpe® Len Germany ti i al i an ah ta i. iat Tit =e res Moree i lina ‘non levator. (Ebi 7 eauparesthedifetent dive systems) ‘Theat, the EeoDise wa applicable to levator actos KONE’ essing product fae. But ss elevator loa and sped inreu, so di the seo ch aching, trang evenly too ange to fi within he shaft With carent EeoDis ehology 3 16-peron cabin requited 2 mahine rom. Conequiy, based onthe most son abit sss KONE engines nd develop MonoSpace systems fr person and 13-prsonelertors with operating eed of one mete peed tha ‘ed ia Balding of 12 for or {20H _| KONE’ MonoSenee Ano EcoDIe[xqHsrt?_|_ACowransow oF Hvonauue, TRACT AbD EcoDic De UMTS pee Hydomlic _Treion Baie Syed es) 0a 10 10 Toad 0 0 oo oar 0) nH ss a5 ain esi) so rs " nergy onsen 5) 250 soon 2500 Thera 0) “o so ta Oi viene Lier) 200 as ° Wei) 0 40 90 Machine oom) 5 ” ° OTE tener hsm mn ening TKONE ha get MonoSpace dirt Esrope’ largest new: equpent mathe ‘egmen ewe reset cleat, By the ne Hit begun dewlping = ach ia for Germany, MonaSpace had oem rere marketed in the Netherlands nd of lly ached with wang depres of nial succes, nthe Netherlands, rane and the Unted Kingdom. KONE manager slected the Netherlands becuse the market | ‘es dominted by ow-tiecleator, KONE as the market ender, nd he cont euluny horn eg telly progressive were ikl view the MonaSoace ‘Stew ctor sltion rather than one notin complies with exiting codes” (Market Lunches ‘bough enstuction was ela stgnan in te te couniesin which the Mon Suc was st oficaly launched, residential bling scan fr roghy bal ofl strc etn (Table C for more deals on market size and KONES ares ‘have in each country marke). Approximately 90% ofthe nits ol in rance and 70% | ed the Netherlands were los eleva | ove galt con- eee ye eames Prepon ice sta (mediun-qalig)baldings a France and he ‘Netherlands drove broad demand for mid-age,d-quaity eleratos ‘Bsc aang lemor code ha ee ten onlin wh mckin om ‘Monat iets, wet nope Ele were deen opromae ED Salar bie ey ool ens vail rena fom rans ‘Sty ercsnple ben Cera eption were pct las cosatan ge eB wer wachinc oo ese wl quien ata an Pasion40 Cue KONE Th Msp Lec Gorany TARUEC_|_Unr Sues smo Mast Suan 1995 = Unig KONE Ou Shindler THysten Others Fone 700 ha OR MH Uned Kings 3300 20k OKO Neen 2100 ORK Say to seveny percent ofl eatrs odin he Nehelands were geared c= sion, a conequenee of an anomalous marke situation tha had led to eared action ‘ppederts bing shou 5% lon expense than ysl eleratrs. With subit- 1M, geared traction eleraor costing esl vie a mach shai cler- {ocsia the Usted Kingdon, hydric lees accounted for 90%, earl action ‘leyatrson 10% owe seri that are The rench marke wasin-bewen, ‘ih 909 flow hewtrs ac and he reaining 20% geared action, oe ee ‘Given KON differentiation and brand bling objectives, dhe MonoSpace as (Gocraly priced in ine with eqn and more expense) geared tation elevn- for, Manager st KONE? Dur headgoaters sugested tha the MonoSpce be Diced above exiting prices if KONE hed less than 15% marketshare and in Ke ‘ith exiting price level f KONE oterwise ee Tale D). "The petiunsexatied on the MonoSpace in the Netherlands and France were bse onthe KONE beach managers reasoning hat a sigan portion of The savings oft bling + machine rom would acruec ether the owner oF “onstruction company, motivating them to spe the MonoSpce. In France the ‘MonaSpuces energy cst would be FFS,00 per yearles than that of comparable {eaton eestor, efetvel repaying FF30,00 peri in sx years. The price in the United Kingdon wis tated priary bythe 15,000 trans price co KONE, ‘UK, which put oer the PT price Marker Svategios KONE viewed formal laches and ails atonal and loa specialist building {nd architectural joural but penbleo Bee reltonsip-bisedseing, TABLED | Price eves ron KONE Lows Eevavons, 1996 Pu Ghydosls) PF (Racsion) PU (Taon) _MonsSpace Neieind ——DG6SlN0——~ GRAM ©—DGO” EEN re ? rrisoam FF iso00 United Kinglom £15800, sso 550750se 8 KONE: The Map? Lam in Germany $4 the cv itos led wp to dev sles. To foe inal marke aceptanc, he ‘MoooSpace vas ted wr new dies cinerea tial to ater KONE low rie cleatr “The Nethetlands ‘The MonoSpace was warketed in the Netherland primarily tdvough insides customer meetings. Approximately 3,500 secitecs, construc- ‘on componies wners, and consent ware invited wa mailings o compare in lancom one presentations working MonoSpace with hydra and geared action ‘More dan 100 suck presentations were made within the frst ear of Mono mace td ped ei ype WeiMPerfentans for the MonoSpce, ppd on dik to enable conus andar ‘hes to "sop" thi section ivan’ plas, were due tobe approved and inched on the ofcil Netherlands Bldg Dsgn CD ROM, a resource wel for ‘most Dut uling designs. France ‘toners rope Mererorement was placed ia mt The main market launch rook the form Imad ind onsite presentations at cach ofthe coun’ gest onstruction ompaies. “The Voiced Kingdom Given the price ens ofthe UK low-vise market, the Monospace mason The tunerying eclnaogy bins ‘evi of thre presentations made at London's Seience Museum. Five handel on Strocton companies, developers quansy serveyors consultant, and hte were invited of 20 who scepter aD stendol at Teas one presentation. rojeced that MonoSpace would acount for 70% tt sl inthe lorie egrenty ein hee oti lee ftom 98 Be yerr efor) and fis on from 40%), KONE Netherlands ws in the od poston of worrying about having {ined too mach art share nd open the mara. "We didn want conquer the mold wih his obuerved the Netherand general manager,sea Cue ONE Te Mop? Lach Germany ve jist wanted ta maintain markt share nd get higher profits: We dt ‘wana Sate the compestin, bese thee fo way fr ust eimiate an (Gtisora Schindler Well ave w ive wth hee competitor freer Oe ‘coll bey KONE for ath and am afford to drop te pies tthe pint {Hat Monospace beneitnot having machine rom energy sing and toonbecome neaningle. Sales in Erance and the United Kingdom contrasted with the success in the [Netherland In France the st yea sles arge for Monospace was 300 unit 170% of KONE anal resident sales. Dung the Sst threx months, nly 0 ‘MonoSpace units were sold Inthe United Kingdom no units had een sold one ‘month ser launck (Customer reactions and learning points Noble among euoress’ generals. Se eae cee eee ee Competioe reactions Although ino sping tees were encountered, KONE’: director of VE sles remark tat "the competion’ rection war one of stunned silence forthe most pat" One competitor alfeed to pay forthe machine rooms if ‘tomes bought elevators another competitor ol clstones that here ws 0 ‘provision or ventlaton with the MenoSpace, which was te, dherwal loses being So low dt there was no ec for venation In France some competitr salespeople {old eustemer that KONE had recived approval fr only 10 MoneSpaceelerator lls, which owas wus goverment suthorites were orevew the inal 10 ‘nsallaien and if hey proved acepable, grant complete spprorl, sande proce hz er te approval of ny new ecology ean, Leanne Pours Sales mes | erhap owing to ther emphass on ini eal fst he aspect expece Yo appeal to contre ‘on compan mote need ors machine oom and fering o ‘rane ands isallaen roceses—ether were consequent hee beng 9 ‘machine wom wo be bail «savings nt nly acre othe ewaer, or were Be fis nat nique to MaoSpace, iy they were ofered by the ene rng a se Slertrs. [Nether bailders sad tn sve DG 7,000-DG 8,00 fa machine oom sey in ‘he dg was not bull Otherwise sheers sings would be il, With he w= ‘erage builders rely nested sefloding and used x rane only if it was already ‘ite Altongh les coordination needed between elevator iar and gener Ire sch process savings wee gene aot raed the Netherlands Oneal (eine)(Case ONE The hic amc iv army 583 «hy sed inthe mide of ulin proces dat ok year was consieredincnse- ‘nena by consreton companies that reasoned ta the workers might pend tat Fafa ployngcards anyway In France, however, where win relations dictated 2 igh dere of ordination among workers and week mestings othe mie heads any proses conpeession was value’ The station wa mc the sare in he United Kington. KONE found dat ny sults, sch using lamer sss some tine/procest savlgs, et, en together could count wo 5% stings af the constsucton sed intallton cot fo the comaraton coger. “The MonaSpact’s energy savings were not expected ‘bean imporant selling point in the Nederlands. Energy supplies in parc Ta, however, ound that he low-energy consuming Mona Space dat dim ight 5 seed tcon or hydraulic elerstor sometimes dda convequence of the power Surge reared or take-of The electric ses equiel bythe MonoSpace were so ‘much less et» DG 60 per yea for MonoSpace vers DG 1600p yes foe by “lic lestor aes or DG 800 per yar for geared ection levator fer KONE. [Netherlands fond that energy supers an ioence group i intialy had no te were cnmnquenty recommending Monae RIB rind tr en he ha oh op the MonaSpace cold noe be we in buldings with penthouses (ble sccess was necesty). Beets ts temperature had wo be maitaned at beeween 5°C and 44°C, iewas ako noc suitable for outdoor use. KONE Necherlads discovered that, ‘ches had gun designing ll thei buildings, ncoding thor with penthouses tnd outdoor ebvators, fr the MonoSpace that i sana machine rooms. To seid ‘eperesons, I poblicyfr the MenoSpace cared "waming” explaining hee folnities AED (ONE tiscoverd dat in bor France andthe Netherlands some cnerucion companies a tained the machine room sings by cezactng » surcare from the ownet/devlopes.Consequn al fue literate ‘dred to contraction companies mite the cost sings rom cna hea ‘de room and lower unig costs ofthe MonaSpace nal ce coun, and parila inthe Unite Kingdom, ‘cron worred a ving the machine room oa of bung desis wold leave ‘hom agent ee gouging. Alen ether machine room len rps, cstrsers Feed ty halo py whatever KONE asked KONE countered by emphasing 18 interest ia long-term pureshie ae preserving epution, ‘Customers wanted t sean installed Monospace before Filing ob “ines pgs" Ths problem was addressed in he [Natl byinsaing a working MonoSpaein KONE's Netotandsheadarts5 Cone HONE. Th Mop? Lam Goan, Leuneh ‘Prcing forthe Monospace elevator in Germany had not bee set, but production oss were estimated to be about he same or comparable yale erator. The German Elevator Market “The German cansrution nda had undergone ace of bom and bust sine the 198 enieaion of Ease and Wee With te bom in contraction the new eles tormaket grew fom 8,000 uit in 1988 to = high of 15,500 wits in 195, when the enstraction boom ended sbruply. Demand for new elevator eqpment wa row espected to shrink by 13% by the Year 2000. The German eettor market we dominated by residential construction, The proportion of elevator units alld in lowe rede bulings in 195, 74%, ws ot especed to change significantly ‘ove the following iv years In 1995 hydeieleatr scented for approximately {60% of the German lowe residential clevitor mle, geared tact levators ming up the cet. Two-rd of the geared traction units were ofthe move expen sive PU ny. Demand for new commercial space onthe other hand, wa dren by siren one apc Competition ‘Themajors Thesis tsjorplyersinthe Gennan ert market wee Schindler, Ot, ‘igs, KONE, Hausa pd Schnee Son Gwe Table Al operated cag ‘ot Gerany and exh slated 2-hour sevice networks an ne eles sls ahd ‘ttallaion branches and manlearing eiserboth a Genny and and. ‘The mid-size players Approximately 30 mid-size player, with new eqipment sales aging om 10D to 300 clevstos pe yen, operate eon aon some ‘ofthe produced = few key components 4 cs), mos outoured manafeorng {TABLE _|_ Gera Euvaron hous: 1995 Mane Suan [Now Hlestr Maret(Case KONE The MonSpa Lue Gamany 545 Srl ol companis, exmed “cowboys,” dha uss operated Most ekg itera maroc ap fs, ware oewed on the porehae and ascmblyof component nd isan and local eve, (Market Performance ‘With te abrape end of Germany's castrction Boom, new elevator prices fl between 5% and 7% in 1994 and 1995. Many small and rome mid-sie players ‘esponded by abandoning or sharply earaing effort to ell new elevator equip ‘ment in for af ocsing on svi, exerting atonal price premre ther wel ‘Amongstthe jr, Schindler’: eprtd loses were pproimatly 19, Oi 13%, oftamover Further, Schindler bad focused during ths period on gaining share and theome te clear market leader in hydaulic levator. Os proased abject, eo climate loses in the neelevatr business, bad aud eo love marke share. Low-Rise Elevator Customers Property developers, general contractors and archi were among tho invohed a purchase coor in Germanys ower elt market. Property developers were Principally concerned withthe overall er of developing anew bling ot renova lnyan easing propery std Gctors ha affected the investment ale of er prop ‘es, incudig canstvedon quality, diel of eompleton, and operating cose Tacs eoic of elevator was viewed ae having Kl impact on ovrll conaotion oss, KONE and oer elevator companies, peraving property developers tel trina in the decison, Seldon consmunieated direct wid ther, or baildigsof all pes, the general contactors responsible for construction snd zenoation according propery developer nd seit’ plans exerted the [rests infueceon elev prchate party developers constemly soe the bid proce pica ivi id fom tives o t,t pressure contractors for pie rection. In rn, contac en sed conpestive bidding procs to procure specalzed bling system sch Stelwork, elevators and HVAC (heating, venation, and ai condiaoning sscems. ‘Occasion a wo stage bidding process was employed where eonectrs would invite “preliminary” bid, 8 from leat sopplion, and incorporate low price fering ino their over constuction bid then afer the cnsedeion contact had then aware re-apen the process and ask suppl to esi Tf the propery Aoveloper and contractor hd negated an overall price eduction, the contac ‘wou ty pss on din rice reductions wo he sen spies. Residential blldings were wally bul by smaller contactors who, potessng lie tenia! knowledge, ofen relied on archites to select levator Although architec general id not make the eletorselecsion forthe mid-size hotels sd ‘festa lager Contractors uray bat fr which the higher end reidenta ‘lerasrs were ypicaly uted, they shacet ively secre cleats ceametic + ‘option (eg se or mie openng door, erie paneling aerial and eco, and ‘forh) KONE managers bdved that nthe German eden marke he Sa ‘levator preae decison ws made bythe general contractor 50% afte tne, by {he arches 4096 of the needy x popety develope 10% ofthe tne546 Cote __——— KONE Te MoS Lec in Germany KONE Aufeug’s sling process KONE, rr — years In mon ses OO ula (ONE be Se of ear payers ily all due cusomers nce de min the shore ‘of edo o whom they sent ou the equ for bid. Ths, KONE had acess othe ‘entre denand for lems inthe German marke CCastomeringutes were llawed by wise rom a KONE Aufng salesperson the customer canat usally the consrcton company amanoger of achtece. ‘The salesperioa reviewed the architec’ drawings design specifications. and any spe ‘al requirements and would detail elevator options inthe form of sketch or CAD (Gompotr-sded Desi raving. fe served one KONE beach managers "The i” fr eesyeson alone isthe expetin meeting the ators needs." Once clevtr speciation bd been negotiate » contrat’ perchanig ‘manager became the main pin of contact and dscssion sifted fo paneer snl price. From start inh the procurement proces ran 8-15 months Launch Decisions "is pr-auch planning began wid cbaining regulatory approval forthe Mono ‘Space poo. Ia ineladed exablshing Manas pilot istalains nbn scrss KONE Aug's thie sepions In Naver 195 for hyde eer eur, tomers wee given the opion of enetng thr existing overs o MoneSpace Thy were told at they would recive new, improved die ont tthe preity agreed hydric levator price, bt, ste machine rooms for these buldings hat sen teen designed and constructed, noe thatthe MonaSpace technology eliminated the ‘nee for amchine rom, Between unary 1996 a June 196 to lespeople were hanged t arrange 30 more pilot installation All pilot cstomers wee piven the ‘option of sitching fram gated tacionelerstor to lonaSpace at no atonal ‘ant. The nefits ofclinatng the machine room and reduced eaergy consi ‘on, and te manner in wich de roping worked, wit an emphasis on easy 20d ‘ell were cael expsined All prospective plot cutomers were howe, kaw "ep quit abot the ecology ‘Having consolidated his knowledge ofthe Gertan marke and lessons ined ln he Neerland France, and the United Kingdom, Hata ws concent on selecting the best maretng resources le had thi dipole marketing Kitt had een ceveloped by KONI Braselehealqarisithaed the following com Ponents(ahibit9 provides deals of the marketing kit components ands sum tacking resources). ‘taste that German levator companis,paticltly KONE's age om pesos, red on abroad range of marketing comnmuniatins tht ince sdver "sing, dre mail, customer and Ianch event, exhibitions customer vit nd publreaions He wondeced which of thee were met appropri or the acho Trova(Case 8 KONE Th MSc Lee Garay S47 cetumrrs | _beaas ue Mans Kir Ato Sanna’ oF Manet Resounces “The marketing bie developed by KONE’ Hess headquarters incl the flow Ing component “+ A pre hit fentaring 2 CD-ROM and website + A MonoSpace cancept brochure to supplement exiting low-rise line Tera + Two PowerPoint sles presentations, one directed at bulders, aches, and omers, the others technical presentation for conan and taining poupoves + A Benin MonoSpcevideotps, + Trade pres releases deed at acta, builders, and property owners! managers. + Building and planing guides tae ineladed dimensional sees nd front- line CD rendering ofthe onoSpce. + Monospace hte specications + tot elemtr cost comparison fom, + Aude moti adversement on CD-ROM; st of porters ample dct mall pee; miniure state MonaSpace move + Asmpling of promotional gf sich ss pns and mow pads “The mucketng resourees sa incuded the allowing (GRRE, wc apperred mainly in clewstor newspapers and journals (atonal ud architerral newspapers and journal (oa! tad some nation, ‘ere used psc by sal end tsi companies Large certo compenies ‘eldom averse, Single ads were most common, campaign ae a orb comnts an gee ble forthe MonoSpace launch in Germany receded new product oducts Al he age players ad wed "roadshows benreen 1993 and 1955. Castomers were invited to loa hotels for seins nd refement and recived fll op tlepone all EB int component cpu eupported by a ‘common mene of communication, Mos leraare bad teal theaverage German ester’ tcl orientation fs were centered around press releases and rest cd eye meat Other companies generally receive notice en i loeal papers or when something tut ofthe erfiary acute collateral were clerstor companies! most engONE: The MaSpa® Lan Gey Lzunch Options Diet mall—KONE’s direct mail experience was limited. Resdy-to-mai/fax Teel eel ce fr pe ee a aa sc IS Tad Ta ents ey icy propa pec nd eg era ene eae reine tah area tiled gs cpl tn) “esp iy 30. Sales vt“A ales vi ul rexel 17 day af lesen’ ine. Cat of mts and depen ne vaso DME. Video-Dabbing th vides int Geran would cot DM 20,00, ech vie apy Da “elenaiting—Ons ote nme pone lo 300 people wood ‘crayon Dv 100.00. Semlna—For an ndenc fsbo bt pc cing a the pring nd Ilingfintaons wl cut pete DM 100 Eshibion/Tadeshow—To spe forte dy at "Te Kons rg saa cnet ida tre show hell in Gemany woul cos shor Dt ny ROWE fa fod at ct high ee rape coat “radepret nd jour —Cermany hed apoxinaely 25 aie ‘ula ana 2 lings card rae +A blak snd white one-page adverisementin fre monthly journal witha ‘eaation 025,000 would cost shout DM 3,00. +A black and white, one-page advertisement in week journal priced DM 3.50 with drelation of 17,00 would cot DM 2,300, + Ablick nd white, one-gnge adversermentin a weekly journal with ccs Iain f 1,00 net D2, 700. * Able and white, one-page advenementin a monthly jena wih cry Iain 1800 cone DM ‘Ashe pondered thas details, Hii recognized that mmedie, frorableresuks fiom the German lunch were wal to KONE. Yet, ke had to kp in mind thatthe pricing nd prot osioning satis he set for MonoSpace in Germaty would fave sgiicanmput onthe long-term prospects for KONE, With lot stake, he adie roo for eer