Pintura Corporation: The Lena Launch Decision Harvard Case Solution & Analysis

Pintura Corporation: The Lena Launch Decision Case Study Solution

Pros:

  1. It would reduce the risk of product failure in new or existing markets.
  2. It would allow the company to add features in the existing products.

Cons:

  1. It would not offer competitive advantage to the company.
  2. The company would miss market opportunities to explore or capture for maximizing the market share.
  3. It would lead to poor company image.
  4. It would not enlarge the customer base, thus it would not add value to the business.

Recommendation, Rationale & Implementation Plan

After taking into consideration the alternatives which include; product development, diversification strategy to maximize the market share, it is to recommend that the company should launch Lena in domestic as well as in international markets to capture or explore the market opportunity and to accelerate the business growth. Since, the market is competitive and the market rivals are trying to progress or evolve with the passage of time, they tend to steal the customers from the company, which in turn would result in reduced profits and revenues. So, considering that the company is willing to stay as a market leader, the ultimate choice is to outplay them and formulate market or product development strategies(Tacke, 2016). Also the forecasting shows that the idea of launching Lena is existing, and new markets would leverage the profits more as compared to launching only in existing market.

It is significantly important for the company to invest in promotion and distribution. Marketing/ advertising. The company should be ahead of the intense competition in the market by heavily investing in R&D and by adding functionality. Not only this, the company should create market needs by product differentiation and enter into the new channels or new geographies, it should also invest in the brand equity and distribution.

In addition to this, the company should keep track of the changing rules and regulations as well as upcoming chemical standards. It should be informed about labelling requirements and the profit, and strategic objectives of the company should be aligned with market trends which moves towards low VOC emission, stricter environmental regulations, fewer cost and less usage of coatings.(Winstanley, 2010).

The action or implementation is as follows:

Pricing Strategy:

The company would set high prices for the Lena product to skim the maximum revenues layer by layer from such segments which agree for paying the high prices for products.

Promotional Strategy

The company would use vertical marketing system in the placement for Lena by giving rights to the third party in selling the products to end customers. The strategy includes personal selling, advertising,sales promotion, public relation & publicity. The company must aim to promote its product by maintaining healthy relationships with the third parties.

Distribution channel

The company would sell products through intermediaries which includes; builders, contractors and architects.

Segmentation

It is recommended that Pintura Corporation should target contractors, architects and builders because by targeting them, the company would be able to increase its profits and sales and capture the market. Since, Pintura has goodwill of quality product in customer’s mind, so Pintura can boost up this image more by targeting such segments. Also, it is to notify that their purchase decisions are not influenced by price rather than quality of product, the company can target such segments for high range products.

Targeting

The company should select builders, contractors, and architects to sell the product at high price, hence leveraging the profitability of the company.

Positioning

The company can position the contractors, architects and builder son the basis of the quality and durability of the product because they are quality oriented and are not concerned with product’s price.(Shapiro, 2005).

Appendix A – SWOT Analysis

StrengthsWeaknesses
      Wide range of product or product portfolio

Quality centric company

Strong R&D activities

Innovation &technology advancement

High market share of company’s divisions

      limited market share

Intensity of competition

OpportunitiesThreats
      Tap unmet markets

continuous R&D

brand awareness for its lesser known products

      uncertainty and volatility of the world markets

changing customer perception and taste

adverse effects of economic slowdown

stringent governmental regulation and rules

Appendix B – Marketing Mi

Appendix C – To launch Lena in existing market

To launch Lena in existing market 
Profit & Loss
      
Year20192020202120222023
Revenue growth30.0%35.0%35.0%30.0%25.0%
Gross margin61.1%86.0%86.0%85.0%84.0%
SGA expense / Revenue54.4%54.4%54.4%63.0%63.0%
R&D expense / Revenue8.9%9.0%9.0%8.5%8.5%
      
Revenue180.0243.0328.1426.5533.1
Gross profit110.0209.0282.1362.5447.8
SGA expense98.0132.3178.6268.7335.8
      
R&D expense16.021.929.536.245.3
  EBIT-4.054.874.057.666.6
Tax (38%)-1.5220.8328.1221.8825.32
Profit after tax -2.48033.98245.87635.69541.314

Appendix C – To launch Lena in existing and new market

To launch Lena in existing and new markets
Profit & Loss
      
Year20192020202120222023
Revenue growth35%35%35%30%25%
Gross margin88%86%86%85%84%
SGA expense / Revenue64%64%64%63%63%
R&D expense / Revenue8%9%9%9%9%
      
Revenue205.4277.29374.3415486.644608.3049
Gross profit180.7238.4694321.9337413.6474510.9761
SGA expense132178.2240.57306.5857383.2321
Exchange gain 211.562285.6087385.5717501.2433626.5541
      
R&D expense1624.956133.6907441.3647451.70592
  EBIT32.735.313347.6729565.6969376.03812
Tax (38%)12.42613.4190518.1157224.9648328.89448
Profit after tax 20.27421.8942529.5572340.732147.14363

 

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