COMMERCIALIZING THE KUNST 1600 DRY PISTON VACUUM PUMP

Submitted by Group 8

Mayank Bharti PGP 16/211

Nandini Priya PGP 16/214 Shaheen Malik PGP/16227 Shrutika Gupta PGP16/228

Q.1 What are the major, quantifiable value and price elements associated with the kunst 1600?
Ans. Value Elements: Savings in cost with the elimination of oil change process In contrast to conventional pumps, Kunst 1600 is oil free which saves expenses on oil

change process
Greater mobility Aluminum body of the Kunst 1600 made it lighter and hence easy to carry around than traditional pumps

Greater product efficiency

In case of light commercial refrigerator repairs there are incremental revenues due to greater product efficiency

PRICE ELEMENT:
Increased pump durability The Kunst 1600 lasts 2 to 3 times longer than the incumbents in most segments.

Kunst pumps last at least 6 years in the field

This means that repair firms will have to buy more conventional pumps than Kunst 1600

Q 2. What additional value placeholders, elements not presently quantified, merit consideration in your value model? Ans. Value Placeholders Following are the value placeholders, elements in the model: Difference in weight The Kunst 1600 is lighter than pumps currently used in residential AC repairs and heavier than those used in home refrigerator and light commercial refrigerator repairs. These weight differences may impact technician preferences. Durability of parts As the Kunst 1600 is constructed of molded aluminum, its parts may be subject to less corrosion and thus last longer. Brand equity Potential customers will be willing to pay a premium price to obtain a vaccum pump with Kunst brand name on it Expected value of oil dumping fines The expected penalty for dumping a gallon of oil is $150 for individual and $ 2000 for company

Q. 3 Construct a costumer value model for kunst 1600 in the residential AC , home refrigerator and light commercial refrigerator repair market segments? Ans. Cost savings per oil change = Maintenance worker cost + Oil price per quart scouring soap price + Towels price + Oil disposable cost Maintenance worker cost = Number of hours * Rate per hour Oil disposable cost = Cost per gallon * Number of gallons = $318 Differential price = Pump price / Lifetime Pumps price / lifetime Residential AC Repair segment : Cost savings per oil change = ( 12* 0.5) + 8 + 0.5 + 0.15 + (5 *0.25) = $15.90 Cost savings per year = Cost savings per oil change * Number of oil changes =$15.90 * 20 = $318 Difference in price = $250/2.5 - $500/6 =$16.67

Home Refrigerator Repair segment: cost savings per oil change = ( 15* 0.5) + 4 + 0.5 + 0.15 + (5 *0.125) = $12.775 Cost savings per year = Cost savings per oil change * Number of oil changes =$12.775 *12 = $153.20 Difference in price = $150/3 - $500/6 =$33.33 Light Commercial Refrigerator: cost savings per oil change = ( 24* 0.5) + 4 + 0.5 + 0.15 + (5 *0.125) = $17.275 Cost savings per year = Cost savings per oil change * Number of oil changes =$17.275 *12 = $207.30 Incremental profit = Number of additional * Revenue per job * Number of weeks = 2*30 *12 = $720 Difference in price = $200/2 - $500/6 =$16.67

Q.4 using your value model, select a target market segment(s) for commercialization efforts. Justify your choice. Items Residential Ac Home Refrigerator Light commercial

Oil change savings

Incremental profit Total value

$318.00

$153.30

$207.30

$720

$318.00

$153.30

$927.30

We would like to go light commercial Refrigerator repair because Value is created is the highest when compared with the rest of the market segments ( Inferred from the table)

It increases the number of additional jobs that can be performed by reducing the
vaccuming time. It is estimated to be 2 weeks with 10 minutes decrease in vaccuming time Does not requires frequent oil changes. Thus saving the cost of $207.30 with additional cost of oil disposal is also removed Less number of established players when compared with market Segment Residential repairs

Q.5 Write a value preposition for the Kunt 1600 for the target segment?

Ans Value preposition would be Kunt will help to do additional money in a busy season as well reliving from the problem of frequent oil changes and coming with greater durability and mobility.

Thank you..