Whether Sealed Air Should Introduce a Line for Uncoated in Us Market

Whether sealed air should introduce a line for uncoated in US market

Sealed air should introduce the line for uncoated in US market. Sealed air has the reputation of customer oriented. The coated bubbles have had greatly met customer's demand on quality as well as total cost solution. As the business environment changes, uncoated bubbles is likely be able to meet certain customers' need with more cost effective solution. The strategy of introduction of uncoated bubble lines can be market campaigned for Sealed air’s continuous endeavor for providing best cost solution to customers.

Customer-Market Segmentation

Sealed air is a company to provide effective packaging solution to end users who need pack and ship the parts. Sealed air differentiates themselves by total packaging cost and its superior quality. One of the most important factors that Sealed air advocates is the total thickness loss at initial and 30days, which outperforming all the products available in market. However, towards this differentiated point, a further segmentation of customers' package in-transit time is required (e.g. by week). With that information, the market can be segmented based on customer package in-transit time. Sealed air will be benefited by doing such to understand which customer segment actually does not care too much about thickness loss over certain period time, which are really continue demand less thickness loss. Although the market confused by what material can be used to protect the parts during transit. Sear air need to continue its efforts to segment the customer base who understand the packaging material cost/performance from the ones who purely look at the price/delivery factor.

Customer- Market potential analysis

The total protective material market size is $726.6M .The Flexible wraps plus void fill is 141.6M, where the majority is flexible wraps at $126M in 1980: for paper based material is $51M, forms based in $44M, and the Polyethylene air bubble is $31M. For the past two years from 1978 to 1980, the CAGR for flexible wraps market is 17%. Coated and uncoated bubbles grows at 20%; Paper-based remains stable; While foams based material increase significantly at 50% driven by Polyethylene forms. These data suggested that the overall market has been growing. From the retail price chart, foams came as a cost effective solution to compete with paper. Hence, as long as it comes out a competitive cost solution, bubble companies can also play a significant role to compete with paper and form based companies in the lower cost segment.

Customer Analysis

For uncoated bubbles application, Sealed air should target more price sensitive (/lower cost) segment. In this segment, it can be divided by two groups. One is that they are sophisticated packaging engineer and they know the coated bubbles is not the best solution due to various reasons- e.g. the in-transit time is limited and therefore the advantage of coated bubbles for not losing thickness is not viewed necessary. The other group is very price driven and has not much technical packaging background; they most likely randomly purchases paper, foam, and or uncoated bubbles. This is also the targeted customer as Sealed air's strong consultative sales forces by being able to demonstrate the benefits for uncoated bubbles.

Sealed air have played dominated role in bubbles market. They have well established distributor system across the country. In addition, the company and major distributors have strong relationships (demonstrated by major distributor's loyalty) thanks to selective distribution system.

From manufacturing perspective,