Curled Metal Inc.

- Engineered Products Division

Group 9- The Alco Holics

Curled Metal Inc.s new product cushion pads will be used to drive piles that support large
structures and it is believed that a successful market introduction could double the sales of the
company. Following table predicts the estimated market size for this product.
Feet of Piles Driven Annually
Feet Driven per set of CMI Pads (6)
Total CMI Sets required
CMI Pads per set
CMI Pads required per year
Selling price per pad 11 1/2''
Total Estimated Annual Market Size

340,000,000
10,000
34,000
6
204000
$199.99
$40,797,960.0
0

From the tests at Kendrick Foundation Company and Corey constructions it was found that CMI
pads drove piles 33% faster and lasted for the entire job. It was also believed to have a 10 times
more life than conventional pads. Other benefits of the CMI pads included its light weight and its
ability to eliminate downtime required for changeover. Following is the suggestive list of costs
and prices related to pads.
Item
Cost per Conventional pad in Kendrick Construction
Cost per Conventional pad in Corey Construction
Manufacturing Costs CMI 11 1/2 with new tool
Manufacturing Costs CMI 11 1/2
Cost per CMI pad relative to Conventional in
Kendrick
Cost per CMI pad relative to Conventional pad in
Corey
Savings Per pad in Kendrick Construction
Savings per pad in Corey Construction

Value
$6.25
$10
$207.5
4
$444.3
6
$500
$1,200
$2,975
$3,570

Curled Metal Inc. - Engineered Products Division

Group 9- The Alco Holics

There are savings of about $3000-$3500 per pad by using the CMI pad as per the result by the
Kendrick and Corey Construction and the average cost per real hour estimate. So its safe to
ascribe a monetary value of $3000 per pad to the customer.
Management of CMI knew that the 11 inches cushion pads are most popular and information
on use of other sizes was vague. Accordingly, CMI should start with the cushion pads that are 11
inches with the purchase of the permanent tooling considering its manufacturing costs benefits
and charge a higher price of about $2000 for a pad to skim the market first and reduce the price
later on. The profits from 11 inch could then be compensated for other higher size cushion
pads.
The strategic objectives of CMI should be to price the product higher while differentiating it with
the help of promotions and branding by coining it as the work saving tool. It should be sold with
direct sales methods to the contractors. After establishing, the brand name should be protected by
applying for patent so that outside vendors that supply raw materials are not able to enter
competition easily.
Promotion could be achieved by convincing important influencers to endorse CMI Cushion pads
such as pile hammer manufacturers, architectural constructors, consulting engineers, soil
consultants and independent pile driving contractors. It should be promoted in industry
magazines like Oklahoma Contractor. Promotion should also be targeted through winning the
confidence of Professor Stephen McCormack Pennsylvania A&M University to officially
endorse the product.
Following this integrated strategy; Curled Metal Inc. would be able to enhance its position in the
industry and would be able to command the best market share in the cushion pad segment.