The document consists of case study analysis for Sealed Air Corporation

1. Marketing Strategy for Sealed Air Corporation
Group – 5:
Ankit Malhotra
Prajakta Talathi
Rashmi Lagisetty
Venkataram Grandhi
GROUP-5 SEALED AIR CORPORATION ASSIGNMENT

2. Sealed Air Corporation Assignment
1
Corporate Culture at Sealed Air Corporation
a) Management philosophy
i. Technical Accomplishment – only guarantee of long-term market leadership
ii. Market Leadership – optimizes profit
b) Central theme of Sealed Air’s AirCap cushion selling effort for 10 years
i. Barrier-coatingoninnerside of clear,laminatedplasticsheet containing air bubbles
of uniform size with saran
ii. Customer benefits
c) Market Educating Customers
SealedAireducatedcustomersaware of the advantagesof coatedbubblesandbecause of which
uncoated bubbles never achieved greater than 15% US Market Share
d) Training Manual
SealedAirtrainedtheiremployeesto cope up with competition by distributing them a manual,
“How to Sell against Uncoated Bubbles”
e) Customer-Oriented Approach
Developedpackaging after assessment of packager’s needs and designed a variety of products
for protective packaging
f) Value Addition
Quantity discounts were offered on all materials
g) Quality Provider and Cost-effective Substitute Provider
AirCappointedoutcostsavings andpresentedresultsof fatigueandoriginal thicknessretention
h) Maintaining Distributor Relationship
Even if Sealed Air shipped material directly to customer, distributor’s received 10% margin to
handle user credit and technical service
i) Consultative Selling Approach
Salespeople attempted to show how their products could save on material and labour cost and
reduce damage in the end user’s particular situation
j) Conference Call
Distributor’s identified a potential account and would inform Sealed Air salesperson and the
sales would take place over a joint call
k) Employee Rewards
Salesforce salarieswere above average and compensation included basic pay plus commission
and additional $75 for selling InstaPak and also deducting $75 in case of InstaPack returns
l) Selected Distributor Network
In return received distributor loyalty

3. Sealed Air Corporation Assignment
2
Arguments For and Against Introducing Uncoated Bubble
by Sealed Air
For
a) Sealed Air has the most trained and educated sales representatives to sell the product
b) They enjoy a status of market leader in US
c) Distributors get 10% margins and would be able to sell uncoated bubble in market easily
d) They have easily available resources such as machines and investment
e) They have Operation and Distribution reach in USA, Germany, France and England
Against
a) Will dilute brand image as Sealed Air is believed in delivering superior protection to
consumers
b) As uncoatedare pricedat 35-50% lessthancoated and cost of producinguncoated is less by
55% ($ (43-19)/43), the margins in future earned would be less if entering the uncoated
bubble market
c) Cannibalize coated air bubble wrap market
d) Build on $ 141.6 Million worth market and Saran technology instead of switching to $
1Million worth competition from GAFCEL
e) Price of A-100 (thickness: 3/32 inches) is $20.60 as compared to competitors such as Jiffy: $
25.90, Sentinel: $ 24 and Du Pont: $ 25.17. In six months, A-100 made $ 0.3 Million (17802 *
20.60) [Please refer to Exhibit 4-Foams]
f) AirCapisalreadyenjoyinggrowthfrom1972 onwards,with 18% in 1980; so will concentrate
on the coated bubble wrap market
g) GAFCEL which is in uncoated bubble is not eating into AirCap market of ½ thickness
segment,GAFCEL gained $ 750,000 but AirCap lost only $41,039. In 3/16 thickness segment,
GAFCEL gained $250,000 but AirCap lost only $ 34,343. So with this analysis, Sealed Air
should not enter uncoated bubble segment as the market loss is not due to GAFCEL sales
rise(Please to below attached excel for calculation)
sealed air.xlsx
Major Problems to Overcome if Sealed Air Introduced
Uncoated Bubble
a) Conflicting Customer Perception of Company
Until date, SealedAirsoldtheircoatedproductseducatingcustomersasthe bestpackaging material
but if they enter into uncoated bubble market, the customers will have a conflicting image of the
company. This will lead to brand dilution of Sealed Air.

4. Sealed Air Corporation Assignment
3
b) Fight against Existing Players
GAFCEL, Astro and Hawthorne are the known players in uncoated bubble market and if Sealed Air
plans to enter this market, it has to start from scratch to create a mark and gain its market share.
c) High Cost and Less Production Facilities in Europe
Market share of AirCapin Europe is drastically falling and it faces superior production facilities to
compete against European market. Sealed Air has only two manufacturing units in England and
France and has to highlyinvesttomatchup to the qualityof these superiorproduction facilities and
to gain sales in losing markets.
d) Cannibalize AirCap and InstaPak Market
As uncoated is priced35-50% lesser than coated bubble, this may lead customers to switch from
purchasing InstaPak to Uncoated bubble product thereby cannibalizing its own company growth.
Market Plan for Growth of AirCap
Based on our analysis of the case, we are not entering into uncoated bubble market. This market
plan addresses strategy for growth of coated AirCap.
a) Enter into Foam market of 1/16 and 3/8 thickness
AirCaphas differentcushioninggrades varying in thickness. The competitors already in this market
are JiffyPackaging,Sentinel Products,andDuPontMicrofoam. These foamcompanies have varying
thickness ranging from 1/16 to 3/16 inches. No company deals in the foam thickness of 3/8 inches.
To compete in this market AirCap has launched a product i.e. A-100 and it is priced lower than the
3/32 inch thickness that these companies are producing. It still has a margin of $ 6.82 after the
distributor’s price. To have a better competitive advantage, AirCap can still marginally reduce its
margins on the price. SB-110 and SC-240 also have a competitive pricing advantage and cost lower
than the competing companies do. To enter into competition in this market, AirCap should target
the other two thickness segments to have greater market sales. It has the cost advantage with
technology to be superior in cushioning, and can still compete with the foam category.
i. Introduce More Products such as A-100 and Capitalize on Them
Introduce more products such as A-100 in coated bubble segment; as these products have less
production cost and generate high revenue (From Table C and D, we get sales generated by A-100
from Jan-June 1980, 17802*20.6 = $ 366721; $0.3 M)
AirCap
Price to
Distributor Margin Thickness Jiffy Sentinel
Du Pont
Microfoam
$ $ inches $ $ $
NA 1/16 20.3 18.2 17.2
A-100 20.6 6.82 3/32 25.9 24 25.17
SB-110 30.25 14.24 1/8 34.15 32.7 34.9
SC-240 56.3 23.83 3/16 53.35 49.4 53.86
NA 3/8 NA NA 109.72

5. Sealed Air Corporation Assignment
4
b) Allocate More Sales Force for AirCap
From the case, we learn that in 1976, 28 salesforce devoted 90 % of their time to AirCap, which
generated revenue of $ 14.6 M. In 1981, 62 salesforce devoted just 35% to AirCap and this
generated revenue worth $ 25.3 M. On allocating more focus and salesforce in AirCap market, we
can target to sell more in B2B market where salesforce drive the sales of a company by capturing
and converting more clients.
c) Introduction of AirCap to Positioning, blocking and bracing segment
Aircapenteredthe packagingmarkettoreplace traditional packingmaterials.Aircaptargetmarketis
726.6million but not the 1million market gained by uncoated bubble market. So Aircap will start
focusing on major market of 585million, reasons are as follows:
 Product Specification mentioned in Table A, SD ½ in. product portfolio matches with the
requirement of the segment (positioning, blocking and bracing )
 Exhibit5 alsosatisfiesthe shockandstress requirements of segment (positioning, blocking
and bracing).
 Exhibit 7 shows that product belonged to this segment like computer terminals, computer
components, PCB’s, motor controls etc has switched to AirCap products. This shows the
potential growth of AirCap in this segment (positioning, blocking and bracing).
 U.S. large distributors have abouthalf salesfrom AirCap even when they approached client
along with Instapak. This also signifies the potential of AirCap products in this segment
(positioning, blocking and bracing).
 60% of sales force on Instapak and 35% of Sales force on Aircap products, Aircap achieved
verysignificantgrowthcomparedto Instapak. Hence re-distribute the sales force of 60% of
Instapakas 40% to Instapakand20% especiallytoAircapsalesforthissegment(positioning,
blocking and bracing).
Employee
Distribution
Instapak Aircap
Aircap-positioning, blocking and
bracing segment Others Total
Current 1980 37.2 21.7 0 3.1 62
Suggested 1981 24.8 21.7 12.4 3.1 62
 Hence we will increase the product portfolio of SD products to meet the requirements of
this segment (positioning, blocking and bracing).