The MonoSpace German Launch

KONE The Monospace launch

With launch of Monospace in UK , Netherlands & France , next launch preparation was for Germany The German Market Scenario was as follows :

Product : o The elevator market of 15500 units was to shrink by 15% from 1996 - 2000 o Residential construction dominated the market o Residential constructions with elevators installed were 74% and forecasted to remain flat till Year 2000 o Market split for Hydraulic elevators & Geared Traction elevators was 60-40 and out of 40 % Traction elevators , 67 % (or 27% of total) were expensive PU type.
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KONE The Monospace launch

Price :
o

There has been pressure on prices with the fall of 5 % in 1994 & 7% in 1995 o This has led to the focus on services than sales o Competition like Schindler has gone upto 11% to be market leader and otis had lost 13% by loss of market share to eliminate losses in new business. Players : o The production cost in Germany is estimated to be same as for o comparative players are divided into Majors , Mid sized and Cowboys and The market hydraulic elevator are elaborated as follows :
Majors 6 companies 24 hrs service networks, , sales & installation branches in Germany. Manufacturing at Germany & abroad Mid Sized 30 players approx Sale of new equipment 100 300 machines annually Cowboys 150 mainly within city No manufacturing setup , mainly dealing with purchase & assembly of component , installation & local service.
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KONE The Monospace launch

People / Customers :
o

The Customers involvement in purchase decisions making is mentioned in following matrix :

Property developers Concerned with overall cost of developing & renovating of property and overall cost and factors affecting investment value (cost, quality ,time)

General contractors Less technical expertise , rely on architects. Numerous small contractors exist

Architects Generally do not select the elevator by make or model but specify desired features like cosmetic options

Perceived as not involved in final decision making (10% of the time)

Use Competitive Bidding Process

Great influence in final decision making (50 % of time)

Execute the contract per property dealers & architects plan

Can influence final decision making (40 % of time)

KONE The Monospace launch

Process : o KONE selling process involved initiation by customer 96% of times o Being major player KONE had access to 100% demand. o Initiation by sending specifications & request for bid o Subsequent visit by sales person to meet the construction manager / architect o Review of architectural drawings , specifications / special requirements / details 5 of elevator etc in sketch or CAD.

KONE The Monospace launch

Launch of Monospace in Germany basis the Market Scanning is proposed as follows :

Promotion / Launch Plan through sales visit o Promote with relevant material the features to Target customers (General Contractors & Architects) o Discuss with customer the ROI & energy savings ( energy cost being a third from hydraulic elevators) and other less maintenance features in totality o Take total orders (with elevator room) o Use services to promote new product and create install base o Price the product lower than Gear Traction elevators to 6

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