Kunst 1600 Dry Piston Vacuum Pump

Content

Case Preparatory Questions Kunst 1600 case overview Preparatory calculations and analysis Solutions

Case Preparatory Questions

1. What are the major, quantifiable value and price elements associated with the Kunst 1600? 2. What additional value placeholders, elements not presently quantified, merit consideration in your value model? 3. Construct a customer value model for the Kunst 1600 in the residential AC, home refrigerator, and light commercial refrigerator repair market segments. 4. Using your value model, select a target market segment(s) for commercialization efforts. Justify your choice.

5.Write a value proposition for the Kunst 1600 for the target market(s)

Kunst 1600 case overview

Atler Gmbh: Parent company of Kunst 1600, founded in 1875, headquartered in Frankfurt, Germany Kunst 1600: injection-molded aluminum pump, 1.6 CPM, weight 16.5 pound Atler acquired Kunst to

Penetrate new market segment in US. Complimentary product lines and market segments Shared Atlers commitment to superior craftsmanship

3 Market Segments home refrigerator Size (units) Pumps used Unit costs 60,000 1 CPM $150 light commercial refrigerator 40,000 1.5 CPM $200 residential AC 125,000 3-6 CPM $250-320

Kunst 1600 offerings and value proposition:

Made from injection molded aluminum: Light weight, non-rusting Pumping speed of 1.6 CFM Light Weight: Weighs 5 to 10 pounds less than competitive products Fewer internal parts than competitive models: more robust and durable Oil free: Cost saving in terms of cost of oil, labor cost, consumables and oil recycle

Better precision

Question 1: What are the major, quantifiable value and price elements associated
with the Kunst 1600?

Price Elements:
Oil Free pump: Kunst claims that the most important benefit it provides in all potential market segments is that technicians will not have to change the oil. Cost savings per oil change = Oil price + Labor cost + Clean-up supplies + Oil disposal cost Cost savings per year = Cost savings per oil change x No. of oil changes per year

Question 1: What are the major, quantifiable value and price elements associated
with the Kunst 1600?

Price Elements:
Additional revenue due to more jobs done: More jobs can be performed by the technicians as they save their productive time for no changing oil in Kunst pumps Additional revenue = Revenue per job x (time saved/time taken per job)

Question 1: What are the major, quantifiable value and price elements associated
with the Kunst 1600?

Value Elements:

Durability:
As the Kunst 1600 is constructed of molded aluminum, its parts may be subject to less corrosion and thus last longer.

Question 2: What additional value placeholders, elements not presently

quantified, merit consideration in your value model?

Light Weight: The Kunst 1600 will weigh 5 to 10 pounds less than competing products. Technicians working for Residential AC will appreciate the light weight pumps however competitors pumps in refrigerator segment is lighter than Kunst 1600. Robust and durable: Due to fewer internal parts, Kunst 1600 will take more physical abuse and be far durable than traditional vacuum pumps Also aluminum body wont rust like vacuum pumps made of steel Brand Equity: Currently, Kunst and Atler have little brand equity in the potential market segments. This may put them at a competitive disadvantage with long-established rivals.

Question 3: Construct a customer value model for the Kunst 1600 in the residential
AC, home refrigerator, and light commercial refrigerator repair market segments.

Customer Value of Kunst 1600 was evaluated over various parameters cost and time saved due to no oil change, profit due to higher efficiency, higher life time.

Question 4: Using your value model, select a target market segment(s) for
commercialization efforts. Justify your choice.
Based on our value model, we conclude that Kunst should target Light Commercial Refrigerator segment initially The Kunst 1600 reduces repair job time by 10 minutes and increases the number of job possible by 2 per week during the summer months This is the only segment where all three value/price elements (incremental profit, cost savings from oil changes, and durability) come into play for the Kunst 1600. As explained in previous slide, Kunst 1600 provides $1123.97 worth value to customer

Residential AC segment is not a feasible option because of the fact that the Kunst 1600 may be considered as under specified by the technicians to perform the job (1.6 CFM pump compared to a 3-6 CFM pump). For Home Refrigerator segment the Kunst 1600 may be over-specified for the job (1.6 CFM pump in a 1 CFM application). The Kunst 1600 does not create incremental jobs here and pumping only takes 15 minutes.

Question 5: Write a value proposition for the Kunst 1600 for the target market(s).

The Kunst 1600 pump provided below value proposition over its competitors in Light Commercial Refrigerator segment . Because it is a compressor, the Kunst 1600 can run longer and cooler than conventional products. This enables the Kunst 1600 to function more efficiently than competing products thereby enabling the technicians to reduce the vacuuming time by 10 min on a typical job Kunst 1600 is oil-free. Cost savings due to elimination of oil change expenses and messiness. Kunst 1600 projected a lifetime of 6 years. As per market standard projected lifetime of a vacuum pump is 2 years only Kunst 1600 is made from injection-molded aluminum. It wont rust like vacuum pumps made of steel

Thank you