PEAK SEALING TECHNOLOGIES

PRODUCT LINE EXTENSION

DILEMMA
Submitted by :

Group 4

1) Describe the company values at PST

The company believes in technological leadership. PSTs President and CEO

believes that this is because of their intensive R&D efforts they have achieved an
unparalleled performance.

PSTs Mission focuses on providing customers with the highest quality,most

innovative products on market.

Deliver the most compelling value proposition.

Focus on premium product category.

Best trained and most knowledgable sales force in the industry.

Analytical sales approach key factor in companys success.

Strong relationships with distributor network & very selective distribution policy.

2) What arguments can be made for introducing an economy tape?

What might the CEO think of these arguments?

There competitors like I-Pack and tensile introducing low

grade seals at very attractive price.
It was found that for packages seals many customers focus
only on price per Roll and delivery dependability.
Boston market open to price sensitivity.
2012 Distribution satisfaction survey showed 20% lower
satisfaction for K-2 sales force.
Distributers previously requested PST for an economy tape
line.
PST Sales team were too busy with other products.

3) What arguments can be made against

introducing an economy tape?

Economic tapes had high risks of failure. Failures could be highly costly and would
cause high buyer dissatisfaction.

Packaging industries where aware of the high quality that K2 tapes delivered as
they had employed engineers who strictly compared all the features so K2 tapes
have a straight win there.

The addition of GP-48 added anew lower cost option to compete withthis segment
which hasproduced 7% of total sales in the K2 lineup in a period of 6 months, a
very significant number.

Competitive focus should be on the Tensile product line. They were able to achieve
$2.7 million in sales in theirfirst year, aswell as having placement alongsideour K2
products.

4) What would be the major issues to overcome if PST were to

introduce economy tape? Propose introductory marketing
program suggestions to overcome these problems.

Introducing a new product line without associating K 2 brand.

Instead of using technology of current K2tapes, this new spinoff
will resemble a non-patented adhesive formulation for these
products. Pricing strategy will be similar to Tensile. K2has a
great distribution network that can aid in theexpansion of this
new product.
There should be a dedicated sales force to explainthis product
to the consumers we are trying totarget. We do not want the
two brands to beassociated. The sales force also needs tobe
trained to handle not just the end user but the distributor as
well.