A Case Study Report on Plastic

Industries Inc.

Prepared by: Group 5

19BSP2634-SHIVANI PANDYA
19BSP2648-SHRADDHA SHARMA
19BSP2685-SHRIPRIYA AGRAWAL
19BSP2724-SHUBHAM DAS
19BSP2756-SHUBHANGI KULSHRESHTHA
19BSP2777-SIDDHANT SALIAN
 Key points of the case study:

• Plastic Industries Inc is an American plastic pipe manufacturer

founded by group of wealthy individuals
• The management of Plastic Industries Inc is currently faced with
promotion problem of its new product
• Though the company had expected four years of operation loss at
initial phase, it became profitable early in the second half of the third
year of operation
• Plastic pipe are manufactured under a process known as extrusion
process
• It is observed that the number of plastic pipe manufactures are small
but increasing in the US market
• Plastic pipes are being considered as a replacement for other types of
pipes in the US market
• Plastic Industries Inc is a major supplier of plastic pipe to major oil
producer companies
 Key points of the case study:

• The plastic pipe market has a major problem related to the

setting of standardization of quality
• The company has three sales engineers and one factory
representative to target its product sales to selected major
oil producers
• The home market has been considered as an attractive and
potential five times bigger market than the current one.
• The bad image of plastic pipes in the home market in
addition to the lack of quality standards and other factors
have made users uninterested about the product
• Advertising to the public and construction industry has
been considered as solution for the current problem faced
in the home market
 SWOT Analysis
The company achieved growth at the third year making it ahead of sated plan
Became a leading and major supplier of plastic pipe to oil producers firms
Strengths Achieved sales and profits of its product in some selected markets
` Easy availability of raw materials for manufacturing
The polyethylene pipe is considered suitable for mine drainage operations and it doesn’t cause
corrosion problems
The sales growth has been below expectation despite the products strength believed to have
Weaknesses No grading of performance of standards in the market to measure plastic pipe
The company did not work on image building activities
Plastic pipe are considered as newly product replacement in the market with prospective sales
The product in the home market is negatively viewed by users and middlemen
The number of plastic manufactures is small in the market which benefit the company
Opportunities
The home market is a new prospective attractive five times bigger market place for the company if
properly promoted and current image changed
There is a room for growth in the future
There is no standardization of quality for plastic pipe exposing the product to possible failures
The building codes of in most cities must be rewritten to allow the use of plastic pipes
Threats The number of plastic producers coming is growing in the market
There is a need for distribution and nearby warehousing points creation to avoid shipping costs in
the future
Q. Should they consider appointing resellers to
expand the market reach , & if so , what would be the
implication for their own sales team .?
• Corporate management often desires higher sales and profits
than indicated by the projections for the SBU portfolio.
• The question then becomes how to grow much faster than
the current businesses will permit.
• One option is to identify opportunities to achieve further
growth within the company’s current businesses (intensive
growth opportunities).
• A second option is to identify opportunities to build or
acquire businesses that are related to the company’s current
businesses (integrative growth opportunities).
• A third option is to identify opportunities to add attractive
businesses that are unrelated to the company’s current
businesses (diversification growth opportunities).
• Yes, they should consider appointing resellers to expand the
market reach because:
• Reduce price to penetrate an existing market. By introducing a
product at a lower price than the pioneer’s, a latecomer can attract
new customers who would not have otherwise purchased such a
product in effect expanding the total market. Reduced price can also
induce the pioneer’s current customers to switch. Still, this strategy
is likely to result in reduced margins for the new entrant compared
with other players in the market, unless the new entrant’s cost of
production is relatively cheaper. This can be adopted by both the
incumbents and pioneers.
• Improve a product or service, with focus on a niche market.
Companies can compete by being innovative in the marketplace. The
innovation may be radical or incremental. One example of
incremental innovation is an enhanced version of an existing
product. The enhanced product can compete directly with existing
products, or it can be positioned to attract a smaller segment of the
existing market. In addition, the improved product or service can
sometimes attract new customers that are not the current target for
the existing product or service.
• Yes Plastic Industries Inc should consider appointing resellers because
getting a new untapped market which is 5 times higher than their current
market can be a lucrative and highly promising for the plastic pipe
manufacturers. As we have seen from the opinion of the plastic industries
Inc executive manager there exists big market opportunity on the hands of
the home construction market.
• Moreover in order to take over the advantages of first entrance into the home
market and gain high market share the company should enter to the
construction market in line with the marketing research. Hence in order to
solve this specific challenge, two ways are available:
• 1. As the construction market is becoming attractive the company should
perform image building work through convincing the middle man. One of the
best ways to win the market is through convincing the middle man to take
and display the product in the eye caching location on the retail shop. As a
result of this the plastics industries Inc. can create positive attitude
regarding the product.
• 2. Through convincing the construction company the plastic company can
create positive attitude on the general public as the construction company
use the product. But the product should be in line with good quality
because first impression is very lasting for long time. Therefore the company
should provide the product which can substitute the metal pipe with
reasonable quality and price.
• The implication for their own sales team would be:
• In this segment, the major job of the sales person become
prospecting and evaluating the potential middle men and users,
approach these people and give a detailed presentation about the
product.
• Hence the major jobs of the sales person become to trigger the need
of the buyers. This target market had an image of plastic pipe was
of a product that would easily break and would not last as long as
conventional pipe, so a technical sales person must make a sales
presentation to persuade prospects that the product is durable and
conventional by trial and make and must give a detailed instruction
how to use the product easily on their demonstration.
• Moreover the job of the sales in this market can also include
servicing by providing support and service to the customer in the
period up to delivery and also post-sale activities.
• Finally to serve this large segment the company needs to build a
warehouse or point of sales at a convenience place to buyers to
easily avail the product in the market.