Analysis

The Sealed Air Corporation is highly committed to the market leadership through innovation and technology. 10 years ago the company had plans to launch the coated air bubble protection product which was named as Air-Cap. However, the current market trends show the rapid displacement of the coated bubbles by the technologically inferior yet the most inexpensive uncoated product. Air-Cap is premium priced and the burgeoning demand for the uncoated bubble poses a direct threat to the long term visibility of the superior Air-Cap.

Therefore, the product manager of the company, Mr. Hauser is in a management dilemma about whether to enter the uncoated bubble market or to come up with any other alternative strategies to overcome the competition emerging from European and the US markets. The company can choose from a range of different options from doing nothing to launching a new product. However, each option raises different issues such as there are issues of cannibalization, product line management issues and the launch and timing of the Air Cap cushioning also needs to be decided.

For this case, we perform the analysis by using the 3M analysis framework and analyze the customer, company and the competition surrounding the Sealed Air Corporation.\

Sealed Air Corporation Harvard Case Solution & Analysis

Customer Analysis

The customer benefits and the barrier coating was the central theme for the Air Cap cushioning of the Sealed Air’s efforts for selling the product for 10 years. The market education of the company had made all the customers aware about the advantages of the coated bubbles and as a result of this education, the uncoated bubbles market had never achieved a market share of more than 15% in US before 1980. The heavy paper products have dominated the market and Sealed Air was one of the primary companies to approach the market with a customer oriented view.

The company began the development of the product by conducting an assessment of the packager’s needs. Since then a number of products designed specifically for the protective packaging have been developed and launched. Sealed Air has fulfilled the needs of its customers through Instapak and the Air Cap bubbles. The protective packaging is sold to the organizational customers through the personal selling within the selected distribution networks. The sales commissions for the Air Cap products have been set at around 2%.

The proliferation of such packaging products has caused the confusion among the consumers because of poor product education. All the US customers previously viewed packaging items as the cost saving items. On the other hand, the packaging engineers can influence only 40% material purchase decisions of the customers. Therefore, it is evident from this analysis that the customers of the company are willing to forego the quality of the products to get the same products at lower prices. Finally, the firms in Europe are less technically oriented and price conscious. They view the packaging items as the expendable commodities. This has caused the manufacturers of inferior uncoated packaging products to co opt the customers of Air Cap with a greater success.............

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