a02_seneca paper company

7/17/2019 A02_Seneca Paper Company

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Seneca Paper Company

Section

-Bipin Ban

-Devanshu Ya

-!eman"h

-'avnee" Sad

-ohan

-S$ Sandeep e



Curren" Si"ua"ion

Seneca had s"andard * super s"andard +rades o, +ummed

"ill pril. 195/

S"andard +rade accoun"ed ,or &0 o, mare" sales

Seneca in"roduced Dura"ape. "hird +rade "ape in 2ay. 195/

Dura"apes share increased "o 0 4i"hin / mon"hs o, in"rodu

Sales o, Super S"andard. S"andard and "hird +rade "o 0.

respec"ively

Seneca announced price increases across all "hree +r

Decem6er. 195/



Compe"i"ion nalysis

East Coast Competition

Phoeni7 * Comp"on sold /5 o, "heir produarea

Phoeni7 has "he s"ron+es" 8o66er or+ania"ion

Comp"ons s"ra"e+y o, promo"in+ i"s un6rande(90 6y volume) 4as demo"iva"in+ i"s 8o66ers

Seneca derives only 0 : 30 o, i"s sales ,rom Mid Western Competition

Seneca remains s"ron+ in "he 2id4es" 4i"h /0sales in "his area

2a8or compe"i"ors are ;le"cher corpora"ion medium-sie producers (<5)



2are" Charac"eris"ics

!i+hly ,ra+men"ed mare"

=o4 en"ry 6arrier

!eavy compe"i"ion

2are" share o, Phoeni7 is 15 "o 0 o66ers are sensi"ive "o 6rand promo"ion and adv

2os" o, "he sales occur "hrou+h 8o66ers

Sales o, "hird-+rade "ape remains >7ed a" 0 o,a,"er hu+e +ro4"h



Pricin+ 2oves

Year Pricing Moves

1955 Small eas"ern producers cu" prices 6y usin+ cheape

'ov 1955 Phoeni7 reduced prices ,rom ?$ "o ?$3 ,or s"an

,ollo4ed@ diAeren"ial pricin+ main"ained

- Small producers con"inued "o cu" price

2arch 195 Phoeni7 reduced prices ,rom ?$3 "o ?$1 ,or s"an

,ollo4ed a+ain@ diAeren"ial pricin+ main"ained

- 2are"s compara"ively s"a6le@ small mid-4es"ern

al4ays sellin+ x cen"s” 6elo4 mare" policy

2ay 195/ Seneca in"roduced Dura"ape a" ?5$&@ small produc

"ape a" ?5$/@ o"hers ,ollo4ed in"roducin+ "hird +rade



Pricin+ 2oves (Con"d$)

Year Pricing Moves

10 Dec 195/ Seneca announced ne4 6ase prices 4i"h 30 day pr

8o66ers@ only a small mid-4es"ern producer ,ollo4ed

an 195& Pro"ec"ion period e7"ended "ill ;e6ruary /. 195&

1% an 19%& Phoeni7. ;le"cher and a ,e4 medium and small

,ollo4ed Senecas ne4 prices

0 an 19%& Comp"on reposi"ioned "las as "hird +rade (?$1

#uardian as a s"andard "ape (?$%)

- hree medium sied mid-4es"ern producers 4i"h

"apes and le," "he prices unchan+ed (S"andard

s"andard ?$%)



Curren" Prices o, compe"i"ors

Third Grade(per bunde!

Standard(per bunde!

Superstandard(per bund

Comp"on "las?$10

#uardian?$%0

-

Phoeni7 and;le"cher ?$10 ?$%0 ?$&5

he "hree>rms

- ?$10 ?$55



;u"ure Pricin+ 2oves

Endus"ry is no" >nancially a""rac"ive a" reduce

Phoeni7 and ;le"cher 4ill s"ic "o "he increas

Comp"on 4ill a++ressively adver"ise "o

superiori"y o, "hird-+rade "ape over compe"i"

F"her 2id-4es"ern compe"i"ors 4ill even"ual

ne4 prices o4in+ "o lo4 mar+ins



Senecas ;u"ure S"ra"e+y

Continue with the announced pricing decision

Focus on advertising- Phoenix has become well k

because of advertising. Therefore the value of adve

segment cannot be underestimated

Offer incentives to obbers to sell aggressively

!nnovate in the product line- "eneca must also innov

out with other superior and customi#ed products to

profits and deliver customer needs



han YouG

a02_seneca paper company

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