Tremco Case Analysis

Introduction

Tremco Ltd. Has been present in the Canadian market since 1962, manufacturing and distributing various construction and maintenance parts and products. Its extensive distribution network allows for thorough distribution throughout Canada. In 1986, Tremco saw an opportunity to import and sell a private label product, known as Foam-O under the new name of Mono Foam. Executives were excited because there would be no new product development costs, as well as no additional overhead costs. With four other companies in the market, Mono Foam was able to break in and capture about 11% of the market share in two years.

Problem

Tremco faces a number of problems ranging from poor market share attributed to a better pricing structure and better positioning by its competitors, to a lack of product awareness amongst its target consumer market caused by lack of advertising. Consequently, this could have been the cause of weak bargaining power resulting in poor positioning of its products at Canadian Tire and other retail stores.

Summary of the Solution

We suggest that Tremco take the less risky alternative and immediately stop importing the 935g can. Instead, they will import the 620g can and focus their efforts on selling the 350g and 620g cans. They should continue to target the same consumers which include small contractors and households. Samples will be distributed to select households in the colder regions of Canada, as the perceived value of Mono Foam will be higher and the samples will be valued more by the consumers. Cannibalization in the market will allow Tremco to capture more of the market, increasing their market share. This increase along with more consumer awareness and demand of the product will put them at a better position to negotiate product placement at Canadian Tire, a national retailer.

Marketing Audit

Segmentation

The market can be segmented into consumer type, container size, seasonal market and geographic sense. The first is to segment the market based on consumer type. As discussed in the courseware, the two the different consumers are “do-it-yourselfers” and small contractors. Secondly, the option for segmenting the market is based on container size. Three product sizes are used in the market for spray foam and they are; 350g, 620g, and 935g containers. Thirdly, the market can be segmented into a seasonal market. Sales for the product peaked in the fall and winter seasons, when customers were preparing to winterize their homes. Lastly, the market can also be segmented in a geographic sense. The three markets mentioned in the case are Canada, Quebec specifically, and the U.S.

Targeting

Mono Foam has decided to target the consumer and small contractor