Problem:
Vehicles built before 1992 were designed to use CFC-12 as a refrigerant. In 1992, the first new vehicles were sold using HFC-134a, a non-ozone depleting replacement for CFC-12. By 1995, all new vehicles were being manufactured using HFC-134a.
Opportunity:
Given the fact that AlliedSignal had no experience at direct selling of refrigerants:
1) careful consideration was given to analyzing the costs of entry into the market including the form and nature of the sales force,
2) consideration was given as to the extent and costs of providing value added services to both the distribution channels and the consumer in order to position itself a preferred vendor and the low margins obtainable based on the current price structure. This was balanced against the current profitability obtained from selling to re-packers without further obligation to provide marketing support services
3) developed a top line assessment of the market opportunity for both 134a and blends, and
4) Allied Signal directed Automotive In-Store Marketing, Inc. to query aftermarket programmed distributors, WD’s, jobbers, mass merchandisers, and aftermarket specialty chains about the level of interest and current or future planned activity in purchasing refrigerants.
Solution:
Automotive In-Store Marketing, Inc. used the following methodology to seek answers to the problems:
1) Quantitative Research,
2) Qualitative Research,
3) Literature Search,
4) Corporate Headquarters input,
5) Primary Research: All trade distribution channels to include: Programmed Distributors, Warehouse Distributors, Auto Warehouse Clubs, Retailers with a major wholesale effort, Fleet Operators, and New Car Dealers,
6) 1 on 1 interviews: Trade probes with key industry senior executives, and
7) Focus Groups with Service Installers.
Result:
The final (confidential) report covered the following topics and made recommendations:
1) Usage and marketing outlook,
2) Stocking levels and brands carried,
3) Sales, volume, and ordering patterns,
4) Product application confusion,
5) Sales and marketing support required,
6) Brand identification options,
7) Attitudes towards suppliers,
8) Shipping and purchasing habits and requirements,
9) Sales and use breakdown by channel,
10) Handling defects,
11) Purchase forecast by type of refrigerant, and
12) Consignment sales opportunities.
Two comprehensive charts were developed demonstrating the following distribution channels:
1) The total automotive aftermarket and
2) The air conditioning channels of distribution.
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