Market expansion policy evaluation by simulation

摘要

This paper is concerned with the evaluation of proposed policies for expanding the market of a speciality industrial product and is based on an actual industrial case study. The product under consideration is relatively new and unique with the company holding excellent raw material and technical knowledge positions. While some completely new industrial processes using the new product are feasible, it is anticipated that the major use of the product will be as a replacement for existing products possessing significantly less advantageous use characteristics at a comparable price. Thus, the potential market for the new product is reasonably well known and the problem becomes one of seeking a greater market share rather than creating a strictly new market.

rn

Historically, the marketing and distribution system for this industrial speciality has involved the use of numerous independently owned outlets (often loosely chain affiliated). These distributors are geographically widely spread across the United States and provide the storage and immediate customer shipping and contact work necessary. This is similar to the usual industrial goods outlet handling a wide variety of products (occasionally offering two or more competitive products of the same type). Because of the extreme financial outlay required, the lack of actual customer marketing experience, the lack of a complete speciality product line in this general market, and time, it is not possible for the company to set up a distribution network of its own. Rather, the expansion of the use of the new product must take place by developing contractual relationships with existing distributors. Thus, a technical sales force must be organized and trained to act as the representative of the company to the various distributors (and also to the distributors' customers). By company policy, this route was preferred rather than, for example, the use of manufacturers agents, etc.