Chapter One Introduction
1.1 Background
Nowadays I am the president of Almetal S.A., an Ecuadorean company stablished inGuayaquil city 25 years ago. Its core business is to manufacture construction relatedproducts: water heater tanks, water pressure tanks, kitchen sinks, wheelbarrows and roofsheets.In the last two years Ecuadorian market shrink as a cause of the economic crisis, but thesales of Almetal increase almost a 40%, due to the import restrictions, which benefit thelocal industry. Therefore, we decide to improve the quality of products and start to givewarranty in order to have a competitive advantage form other local suppliers and importedproducts.After our brand start to be perceive as good quality and recognize for the warranty service,the demand for our products increased, specifically on water heater tanks. Almetal’s mainclients start to demand for technical service. However, they are not just demanding fortechnical service as something goes wrong, but started to demand for installation. Tounderstand this project is important to explain an overview of Almetal clients. Ecuadorhave 24 cities from which Almetal’s main clients are from 12 main cities that representalmost the totality of the sales. Clients are around 140, including retailers and wholesalers.Apart from persification and growth, one of the main reasons that accelerate the processof creating a new company associated with Almetal is that the two main and biggestretailers of Ecuador are actually selling our brand: Kywi and Ferrisariato. This project aimis to create a solution for the customers, not just selling a product, but be in charge of theinstallation, reparation and reposition. Almetal manage many different lines of products asmention before but this project will work with one of their lines, the water heater tanks.Water heater tanks uses the electric energy as a source in order to heat the water, it is usedomestically for different type of uses as bathing, cooking, cleaning, or space heating.
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1.2 Current status
Currently, in Ecuador the plumbing sector is very informal. The existence of companiesthat can be trustable is not an option, as only exist webpages facilitating technical servicefor plumber in general but not specialize. Some of the web pages that appear as possiblecompetitors are obreros Ecuador as Obrerosec.com, which is an online company thatdesignate a technician for different type of installation or problem; they can be reach viaonline or by telephone. They have specialist on construction, electricity, painting, cabinetmaking and plumbing. The other web pages just refer a list of technicians for the areasmentioned before. The most famous and visited web pages are el Official aselofficial.com.ec and nexdu.com, this are web pages that show the telephone, address ,name and specialization of the technician , so there is no warranty of the service.Another situation in this market for technical assistance is that every good and recognizebrand have the technical department or an associate company that is in charge of thetechnical assistance. Companies as Franz Viegner, Edesa, Mabe, Haceb, Teka (kitchenSinks Company), Challenger, Electrolux, whirlpool, termotronic (water heater TankCompany) and Oster. The distribution channel of these companies are distributors andretailers. Distributors and retailers offer the brand’s technical assistance in order to providewarranty to the products.In Ecuador exist two main brands that compete with my company, first one is in Quito, thecapital of Ecuador and the other one in Guayaquil, were Almetal is based too. This twomain competitors manufacture 2 of our product lines, the water pressure tanks and thewater heater tanks. Both of them give warranty to their product but neither give a goodtechnical service or a formal technical service. To understand the current situation of themarket we have to understand that Ecuador is not an industrialized country but exist a lotof import tariffs and taxes for imported products. As I, mention before the list of foreignbrands that are commercialize in Ecuador is large but expensive…is important to mentionit because they offer a formal and good technical service but are expensive products. So, isextremely important to offer Ecuadorian market a less expensive option that accomplishexpectations and make customer to prefer our brand not because can’t afford a foreignbrand but because will have a good service after buying the product.
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Chapter Two literature review
2.1 Literature review
Before opening ALSERVICE, a technical service company, many research andinvestigation about the logistic, costs, service and customers are necessary. First of all, theinvestigation will go through different subjects as: The influence of Ecuadorian energy supply and incentives in Ecuador since2015 Main steps in order to provide a good technical service The high taxation on imported products, and the opportunity to Ecuadoreansuppliers The opportunity after Ecuadorean Earthquake Benchmarking to international brands technical service and local retailer Relationships between manufacture and distributors A complete value chain mattersThe business idea of creating ALSERVICE in order to give technical service toALMETAL is abroad since last year. Ecuador change it preferences from gas consumptionto electric consumption. The high increment on sales of electrical water heaters is notablesince the influence of Ecuadorean government on choosing electricity as a way of powerand not gas.
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2.2 Models/ concepts / frameworks and application
Porter’s value chain modelPorter’s model focus on how inputs are change into outputs that the consumer will buy.Porter use the most comment activities that almost every business pided into primary andsupport activities.The technician arrives to the customer house with all the products required inorder to make the installation. The installation will be free but the complementaryproducts will not. Having the complementary products will be a solution for thecustomer as will save. At the end of installation, the technician will add a freecomplementary product to the customer so they will feel getting much more thanwhat they pay for.Service The call center will call the data base customers every 6 months in order to keeptrack of the product and offering technical service in order to prevent. ( this visitwill have cost)
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Chapter Three The opportunity .............34
3.1 The opportunity........ 34
3.2 Industry analysis ....... 44
3.3 Strategy .......... 46
3.4 Ethics and sustainability ...... 47
Chapter Four The company and the team ........49
4.1 Legal structure .......... 49
4.2 The management team ....... 51
Chapter Five Marketing Plan .......54
5.1 Identification of customers............ 54
5.2 Number of potential customers and potential sales revenues ........... 55
5.3 Requirements of various customer segments ..... 55
5.4 Appropriate sales and promotion approaches .............. 57
5.5 Analysis of how purchase decisions are made and how this behavior can be change ....... 58
5.6 Customer price sensitivity ............. 59
5.7 Cost of acquiring and retaining customers.......... 60
5.8 Strengths and weaknesses of competitors and ways that competitors ....... 62
Chapter Five Marketing Plan
5.1 Identification of customers
The first step in order to develop this project was to find who will be our customer and howto find it. The market research in this case was to study the sales and noticing in whichcity is the major demand. The aim of the project is to know more about the final customerin order to target them well and have the key characteristics of the customer, as: thegender, the occupation, the residential location, telephone number, and so on. Once thisinformation is identify ALSERVICE will have the work to identify more about theircustomers, but this time the opinion of the customer towards the water heater tank. As whatare the family needs in terms of hot water, the budge and how much are willing to pay inorder to get a better product or a better service, brand preferences and why.Something important to understand is what motivates them to buy your product? Inaddition, what demotivate them? Also, as ALSERVICE already understand why they shopAlmetal product is also important to know the preferred method to shop and the best waythey will like to approach the technician and technical support ( by phone, email, visiting,web page)Finally, when all the information is gathered and ALSERVICE got the target is essential toend knowing what the customer think of the service and the product, 6 months afterinstallation.In order to summarize the identification of the customer. In this project and explainedbefore is about creating an aggregate value to ALMETAL products through a newcompany that will give technical service. AL service’s customers will be all the customersof ALMETAL Company that buy water heater tanks and require installation or technicalservice after installation or for guarantee.
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Conversion
ALSERVICE will create an efficient call center and high skilled technicians in order toattend the customer requirement in the minimum time and with a high quality. However,before this occurs, ALSERVICE will train the salesforce of the retail shops andwholesalers of ALMETAL water heater tank in order to allocate the clients to ourinstallation service and technical service. A well-informed sales force ( retailers salesforce) will lead to customers avoid the uncertainty about the guarantee and avoid that the waterheater damage because of informal plumbers. All mentioned before are the inputs ofALSERVICE in order that the customer receive a high quality service. On the other hand,the output that will receive the client is an answer in less than 3 hours and a total solutionin less than 48 hours, adding to this an additional guarantee of 6 months in the electricalelements and free spare parts.The supplier in this case is Florida electric parts, a United States company that supplyelectric water heater elements of CHROMALOX brand; they are suppliers of ALMETALelectric products for their water heater tanks, so the spare parts we will acquire from themso keep the same brand for the spare parts. On the other hand, the other suppliers are theemployees; they will supply their knowledge and work in order to give a good service. Theemployees, especially the technicians will have meetings every month in order to sharenew experiences and learn from their experiences.
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References (abbreviated)