PRESENTED BY: MANISH KANWAR MBA II YEAR

Finland based company established in 1910.  Originally focused on the repair and sale of rebuilt electrical motors.  Over the years it expanded its business activities to manufacture and sale of steel, maritime equipment, cranes, wood handling systems and clinical chemistry analyzers.  By 1995, Kone had divested its non elevator business and become worlds 3rd largest elevator company through 19 acquisitions.


By 1990s, it was dominated by 5 companies Otis of US, Schindler of Switzerland, Kone of Finland, Mitsubishi Electric of Japan & Thyssen of Germany. It is split into two sectors:
New Equipment (V1- minor part of revenue) Service (V2- major part of revenue)

Three types of elevators are available: Gearless Traction Elevators Geared Traction Elevators Hydraulic Elevators

 

Machine room is an inevitable component of elevator construction. Machine room is established:

1. on top of the shaft(PT) 2. On lowest floor next to the shaft(PU) 3. Above the top floor and to the side of the shaft(PS)

 Its

an elevator based on induction motor concept which controls the speed with varying A.C. It eliminated the need of machine room. It is suitable for low rise elevators. 8 person and 13 person mono space elevators do not require machine room but 16 person mono space elevators require machine room. Its a cost reduction elevator system.

The operating income for first 8 months of 1996 was 6.0% of turnover which was 6.7% in the last year for the same period and after tax income for 1996 was zero. To pull company out of this situation, they were looking to launch mono space in German market. They had pre tested this product in other European markets.

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What was the size of mono space opportunity in Germany? What should be the target market? How should they price and position Mono space? What would be needed to ensure a successful launch?

Launched in three countries Netherlands, France & UK. If Kone had less than 15% market share in a country then it would be priced higher than the geared traction elevators otherwise, in line with them. Different marketing strategies followed in all the three countries. In Netherlands, it was a huge success but France and UK were a huge failure.

Concentration should be on contractors and architects rather than builders.  The energy suppliers should have been targeted.  The company should set up the example installation.  They should remove the fear of being a single supplier.  We should have marketing communications like advertisements, direct mail, exhibitions, customer and launch events etc.


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the end of Germanys construction boom, the market for low rise elevators is not as big as it was from 1988 to 1995. They learnt that architects contribute 50%, contractors 40% & builders 10%. They priced the mono space in equivalent to geared traction elevators. The positioning was done through strong marketing communication. The benefits like low energy consumption, zero oil consumption etc. were communicated.

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successful launch, they obtained the regulatory approval for mono space product.

Since, mono space has a technology in which they can even use the machine room, therefore, they should use this technology to replace geared traction elevators at the same price because the geared traction are using PU design which is very expensive and having almost same efficiency. This will help the company to gain market share.