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Entry of Durr Environmental Inc into US Markets

Question

The case is about Durr Environmental, Inc. possible entry into the US market with new deliverables. The case mentions the advantage of Durr Environmental, Inc., over other competitors in the market in providing after sale services to its customers due to presence of strong US representative network, providing services to customers.

Before entering into the market, the company develops segmentation data and conjoint data of the customers, depending upon various variables such as,

Data Variables for Segmentation are,

  • First Variables: Meeting or exceeding or Short of EPA specifications
    • Those which exceed EPA specification by 9 %.
    • Those which exceed EPA specifications by 5 %.
    • Those which meet EPA specifications exactly.
    • Those which are short of expectation by 5 %.
  • Second Variables: Delivery Time
    • 6 Months
    • 9 months
    • 12 months
    • 15 months
  • Third Variable: Pricing
    • $ 600000
    • $ 700000
    • $ 800000
    • $ 900000
  • Forth Variable: Delivering Terms
    • Installed with 2 year warranty
    • Installed with 1 year warranty
    • Installed with Service Contract
    • FOB, with service contract

 

Similarly the Company carried data collection for conjoint analysis and generated data with following broad variables,

  • First Variables: Meeting or exceeding or Short of EPA specifications
    • Those which exceed EPA specification by 9 %.
    • Those which exceed EPA specifications by 5 %.
    • Those which meet EPA specifications exactly.
    • Those which are short of expectation by 5 %.
  • Second Variables: Delivery Time
    • 6 Months
    • 9 months
    • 12 months
    • 15 months
  • Third Variable: Pricing
    • $ 600000
    • $ 700000
    • $ 800000
    • $ 900000
  • Forth Variable: Delivering Terms
    • Installed with 2 year warranty
    • Installed with 1 year warranty
    • Installed with Service Contract
    • FOB, with service contract

 

The company based on data collection for conjoint analysis, also mentions different levels,

Attributes / Levels

Level 1

Level 2

Level 3

Level 4

Efficiency

Exceeds 9%

Exceeds 5%

Meets specifications

Short by 5%

Delivery time

6 months

9 months

12 months

15 months

Price

600000

700000

800000

900000

Delivery terms

Installed, with 2-year warranty

Installed, with 1-year warranty

Installed, with service contract

FOB, with service contract

  

Apart from this the company also collected the Discrimination data, into following categories,

Firmographic Data

  • Industry: Food and Energy
  • Sales in 2004 in $
  • Profit %
  • Return on Equity
  • Employees
  • Sales growth (2003-2004)

Decision process Data

Variables included in this data collection were,

  • Influence of,
  • Top Management
  • Engineering
  • Finance
  • &
  • Purchasing

Strategy Data

  • Growth
  • Profit
  • Market Share
  • Technology leadership
  • CorpCitEnv
  • GovReg

 

This report carries out analysis of this data, to come up with, solutions for following questions,

  • 1: Does it make economic sense to enter US markets?
  • 2: If so, what would be the best offering to make?
  • 3: Would it be better to provide two different offerings? If so, what should they be?
  • 4: Which segment of the customers should they target, with what selling proposition for their new offering(s)?

Out of these, the main problem is, does it make economic sense to enter US markets?

The criteria kept for making this decision is that the marginal revenue must be $ 4 MM/year to justify entry, plus addition cost of $ 3 MM/year to support a second offering. 

Summary

This question belongs to marketing and discusses about market segmentation variables.

Word count: NA

 

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