KONE: The MonoSpace Launch in Germany Harvard Case Solution & Analysis

QUESTION 2

How important is this product launch for KONE? What are the implications of the success or failure of the MonoSpace launch?

The importance for launching the product by KONE is immense because Germany is the largest elevator market of continental Europe. This market has also been contributing to the profits of KONE despite the fact that the overall profits of KONE were almost zero. Apart from this, the importance of the launch of this product was also very high due to the fact that this product had not performed well in other two major markets of Europe which are United Kingdom and France. The launch of Monospace in the German market would prove to be successful due to the fact that the German market was a mid size market and this product would prove to be successful in the low-rise residential elevators segment. This segment has occupied almost 74% of the total elevator market in Germany. Therefore, the new product of KONE would have a solid scope to get successful in this market and the company was considering a solid scope to build and position the new product in the German low-rise elevator market. Apart from this, the company had also received a very positive customer feedback, such as the customer’s very response to the launch of this new product’s new by saying that why did the company did not come up with this product earlier and at least there is something new in the elevator industry now. The success or failure of this product in the German market would have a lot of implications regarding the future of the company. The success or failure of this project would decide that how much this technology would be accepted by the customers and then what would be the future direction of this technology. Apart from these implications, the tangible and intangible benefits of Monospace such as energy efficiency, shorter installation time period, less space requirements, design and aesthetics flexibility, ride-comfort and safety and environmental friendliness would all make this product unique and successful which would in turn increase the sales of the company in the German market where the profits are too low and the other products of the company are not performing quite well.

QUESTION 3

What can be learned from the test market and market launches in the other three countries? How does the German market (and KONE’s position in and approach to it) differ from the other markets? What are the implications of these differences for transferring experience gained in the other markets?

The launch of the various products of the company in the different market such as the French, Dutch and the British markets, offer valuable recommendations and lessons which should be applied to the launch of Monospace in Germany.

It has been demonstrated by Netherlands that being a market leader it is important to design the marketing campaign for the targeted DMUs. Therefore, the management of KONE had offered individual and face to face presentations that were very effective to help in selling all the tangible and intangible benefits of Monospace. KONE has now gained the market knowledge that the new product of the company would have outstanding sales if it is geared against traction elevators in the correct environment.

Another important lesson learned by the management of KONE was that setting an uncompetitive price would have a certain type of reaction from the cost sensitive buyers in the UK market. Also the segmentation of the United Kingdom market in rock bottom elevators and top of the line elevators meant that the management of the company lacked an appropriate target segment of the market which they could attack. Similarly, the France market also had the same type of broad demand of mid quality and the mid range elevators as in the Dutch market, but the issue was that the marketing program of the company was less directed and much more haphazard. Although, there are many lessons that are important to be learned but still attention should be paid to the differences between all the markets and special considerations should be made towards the German market. For instance, the Netherlands market was a small market which was already dominated by KONE. Other differences include the prevalence of the two stage bidding process in Germany and also the regulatory environment. However, KONE still had 9.2% of the total market share in the German market due to KONE Aufzug. The company had a strong presence in Germany and had substantial resources and operation such as man power, sales force, offices and the potential market to launch a new product like MonoSpace in Germany........................................

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