SEALED AIR CORPORATION

Group - 1Abhishek Vyas

09P124Amitrajit Sett 09P126

Jai Kant Gupta 09P143

Manan Nagori 09P151

Ramunas Doksas 10ASB03

Background

25% growth in sales & Earnings 1971-1980 due to market leadership fostered by technology

Main product discussed – AirCap cushioning for packaging with “barrier coating”, providing better protection than competitors

AirCap sales $25.35 million in US in 1980 AirCap cushioning materials starting to

face competition from small producers

The Market

3 major segments: Positioning, blocking and bracing; Flexible wraps; Void fill

2 products from Sealed Air: Instapak and AirCap AirCap positioned as a cost-effective substitute for

competitive products with protective superiority Confusion about the influences on the decision

making of customers – price vs. performance Sealed Air kept most of the US air bubble market Europe: Strong new competitors in England,

France; weak position in Germany. Price playing key role

Distribution

AirCap products sold through distributors Sales force mainly allocating time on

Instapak systems, which did not satisfy distributors – they had higher margins on AirCap

Consultative selling approach highly appreciated by distributors and end-users

Loyalty of distributors + selective distribution policy

Competing uncoated bubble cushioning Astro – inferior products; GAFCEL –

“decent” GAFCEL, new entrant, taking strong

position in price-sensitive New York marketDecision Sealed Air could easily start manufacturing

uncoated product Reaction of distributors unknown Production costs estimated to be comparable

with GAFCEL’s ENTER the uncoated market or REACT in

another way to the new competitors?

Proposal

Enter the uncoated market due to increasing demand in US (New York case) + could help to strengthen position in Europe

Use the knowledge in production to ensure high quality of uncoated products (higher than competitors)

Make the new product a low-end version of AirCap: same high trusted brand with high quality/technical specifications for a lower price than the existing product