KUNST 1600 – CASE ANALYSIS

MANAGING BUSINESS MARKETS COURSE

R. KARTIK NARAYANA
PGP/24/467
1. What are the major, quantifiable value and price elements associated with the Kunst 1600?
• Value Elements
o For both Residential AC Repair Segment and Home & Light commercial refrigerator
segments, Kunst 1600 did not require oil and oil changing process was eliminated,
resulting in cost savings in terms of oil purchases, saving time in oil change resulting
in saving human capital costs and saving of oil disposal charges.
o For Light commercial refrigerator segment, the process time has reduced due to the
efficiency of Kunst 1600, which could be converted to extra revenue by carrying out
more jobs.
o The lifetime of Kunst 1600 is more than other pumps available in the market, which
are used in both Residential AC Repair Segment and Home & Light commercial
refrigerator segments.
• Price Elements
o Compared to other pumps which are traditionally used in both Residential AC Repair
Segment and Home & Light commercial refrigerator segments, Kunst 1600 is
expensive
2. What additional value placeholders, elements not presently quantified, merit consideration in
your value model?

• Kunst 1600 is lighter than other pumps used in Residential AC repairs

• Kunst 1600 is made up of Aluminium, which makes it vulnerable to break and is prone to
corrosion from acids.
• Kunst 1600 has a low brand equity compared to other brands operating in the target segments.
• Environmental benefits exist due to the fact the there is no scope of oil dumping which is known
to pollute the environment.
3. Construct a customer value model for the Kunst 1600 in the residential AC, home refrigerator,
and light commercial refrigerator repair market segments.

Line Item Residential AC Home Refrigerator Light Commercial

Repair Segment Repair Segment Refrigerator
Oil Price $8.00 $4.00 $4.00
Labour Cost for Oil $6.00 $7.50 $12.00
Change
Clean-up supplies $0.65 $0.65 $0.65
Oil Disposal Cost $1.25 $0.625 $0.625
No of Oil changes Per 20 times 12 times 12 times
Year
Cost savings per year $318.00 $153.30 $207.30
for oil changes (A)
Incremental profit $0.00 $0.00 $720.00
per year (B)
Total Value (A+B) $318.00 $153.30 $927.30
Price of Competitor $83.33 $30.00 $40.00
per Year ( C)
Price of Kunst 1600 $66.67 $66.67 $66.67
per Year (D)
Differential Price per -$16.67 $36.67 $26.67
year (D-C)
Value - Price $334.67 $116.63 $900.63
4. Using your value model, select a target market segment(s) for commercialization efforts.
Justify your choice.
Upon seeing the difference between Value and Price among three segments, it is seen that Light
commercial refrigerator has highest value price differential, which means Kunst 1600 offers more value
compared to price paid in the light commercial segment. Also, the non-quantifiable value elements
favour light commercial refrigerator segments as there is no risk of corrosion due to acid and the usage
of oil would harm the environment, which is avoided using Kunst 1600. So, the company should target
Light Commercial refrigerator segment.