GONE managers, however, weren’t quite sure how they would take Moonscape to market. GONE managers had to decide what segment of the market they were going to target, how they were going to penetrate this segment, and how they could quantify the overall economic value of their product to their potential customers. Recommendations The marketing strategy that we chose for GONE Fugue was to advertise their product at trade shows, sales visits, and exhibitions such as Constructor.
We also chose to install fully functional Moonscape elevators in all regional offices throughout
Germany in order to demonstrate the potential benefits of this revolutionary new product first hand to our customers. Moonscape elevators will come with a price guarantee between initial quotes to final delivery. This will alleviate any financial anxiety that our customers might have about dealing with a single supplier. Furthermore, we recommend that GONE set the price of the new Moonscape elevator at DMS 85,000 and increase their sales force, especially in regards to introducing new products, in order to compete with their competitors.
Analysis GONE Moonscape is a revolutionary machine-room-less elevator that yields significant advantages over other designs. The gain of additional usable space for revenue-generating purposes and the greater architectural freedom In the design and construction of new buildings are some of the many reasons why GONE Moonscape is a truly innovative product that will help increase revenues of potential clients. There are many savings that potential clients will see when operating a GONE Moonscape elevator in addition to using new freed up space for revenue generating purposes.
Those Savings include saved energy costs of G 1,540 per year vs.. Hydraulic elevators and G 740 per year vs.. Eared traction elevators. There Is no machine needed to operate the elevator which accounts for another savings of G 7,500. Finally, it is estimated that the savings for a construction company is upwards of 5% of construction costs when using a GONE Moonscape elevator as compared to any other hydraulic or geared traction elevator. Please see attached Excel Spreadsheet for savings comparisons. In addition to the quantitative savings factors, there are also qualitative benefits that Moonscape elevators provide.
These qualitative benefits Include the reduced risk of a fire hazard when compared to unforgettable to ride in with shorter average ride times and are more aesthetically appealing. These improvements will be very popular among future riders. The perceived disadvantages that potential customers may have to the GONE Moonscape elevator are the higher initial investment and the size of the Ecocide required machine room for greater than 16 floors. However, the higher initial investment costs are almost immediately recovered in the cost savings from the machine room of G 7,500, as well as the energy savings of G 1 ,540 per year vs.. Hydraulic elevators and G 740 per year vs.. Geared traction elevators. Our target market segment includes those customers who are less than 16 stories in height, which would eliminate the latter concern. Customer, Company, ; Competition GONE was established in 1910, and headquartered out of Finland. Its core business was focused on the sale and maintenance of electrical motors. Over the years GONE expanded its core business to include steel equipment manufacturing, maritime equipment sales, and elevator manufacturing and services, among many others.
GONE is currently the world’s third largest elevator company behind rivals Otis and Schneider. GONE Fugue A. G. Which operated in Germany and was the most important market in mainland Europe. It manufactures and sells low-rise passenger elevators, medium-rise elevator systems, and high-rise elevator systems. Low-rise elevators accounted for approximately 75% of Cone’s equipment sales, while mid- rise and high-rise elevators accounted for 15% and 10% of sales, respectively (Case). CONE’S elevator business was organized into two distinct divisions: New Equipment, called VI; and Services, called IV.
According to case statistics, the New Equipment Division accounted for 38% of revenue, while the Service Division accounted for 62% f revenue. Over 90% of CONE’S sales are outside of Finland with 53% in the European Union, 29% in North America, 10% in Asia, and 4% in Australia (Case). CONE’S new revolutionary Moonscape elevator is a machine-room-less elevator that will yield significant additional usable space for its customers and allow greater architectural freedom in the design and construction of new buildings.
Moonscape is being targeted at low rise buildings in Germany, which constitute 74% of real estate in Germany. Currently, this segment is served by 60% hydraulic, 40% geared traction elevators. We will target the geared traction segment, albeit with a price slightly higher than current price levels. We make this decision based on the fact that the elevator market is not as cost sensitive as it is quality and utility sensitive based on the fact that over 66% of the geared market went for the more expensive option.
Product, Price, Place, & Promotion Moonscape elevators are a revolutionary product which take induction motors to a new level and offer the chance to architects to get rid of the clumsy and inconvenient machine rooms which so often spoil the perspective of the building or hampers basement and foundation design. It offers developers the chance to save the significant costs related to building these machine rooms. It was attractive owners of projects in that they would be substantially cheaper and safer to operate.
GONE Fugues branch managers have often commented that the sales force of their competitors in Germany often outnumbered those of GONE by one to five. We believe force should be drastically increased to be at par with the competition in order to maximize exposure and to launch this brand new product. Demo installations at our regional headquarters throughout Germany will also convince those careful buyers ho wouldn’t want their project to be the ‘Guiana pigs’ for this new technology. Moonscape has typically found that going to Constructor and other trade shows is not as lucrative.
However, because we are launching a completely revolutionary new product, it is essential that the contractors and architects (who together make up 90% of the elevator decision makers) are exposed to this new product. So while we will continue to invest in trade press and Journal advertising, we will have to make the investment to attend expensive trade shows for maximum impact. While the cost, ease and speed of construction will be emphasized to the contractors, the selling point to the Architects would be the aesthetic value that the absence of a machine room can bring to the skyline.
According to the company’s policy for markets with less than 15% market share, we have decided to price Moonscape slightly above current price levels, I. E. , at DMS 85,000. Most elevator models across brands have been making an average loss of 5% on initial elevator sales. For the first time, Cone’s Moonscape would be profitable in the initial sale as well. Conclusion GONE Moonscape is a revolutionary product with a great potential to bump up avenues for Gone and to regain lost market share even in an economy where construction activity was slow.
GONE has the technology to vastly and dramatically differentiate its products from anything else in the market and be not only qualitatively better, but much more cost effective. With this marketing strategy, we believe GONE has the potential to make the most of Moonscape as a lucrative new product. We believe that with a marketing strategy along the lines of the recommendations made above, Moonscape can be a very lucrative new elevator product and can reap large benefits for GONE in the German market.