Upstream Marketing November 2011

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Strengths Weaknesses Existing rubber flooring product R&D, manufacturing & marketing expertise Established dealer network Broad existing customer base as potential new product market Growing brand & product awareness (Vancouver games, media coverage) LEED Accreditation Healthy holding company turnover with various product lines and markets Opportunities Threats Growing favour towards eco-aware products and companies in all organizational markets (esp. B.C./Canada) Growing awareness of recycled-rubber-based industrial products No existing similar product Product visibility (esp. in large public installations) easily creates interest Low production capacity Limited experience in composite (dual core) product development No patents or unique/specialty products make them open to competitor attack and imitation products Poor brand awareness, disjointed campaign (through resellers) Reddening competition ocean Imitation (inferior or improved) product emergence Long term product performance still to be evaluated Raw material costs may rise with elevated demand (tires and bamboo) From the above, it is noted that Eco-Flex is presented with many opportunities, and each one of these must be investigated to maximise profits. Balancing these against threats highlights the fact that in order to capitalise on these opportunities, while eradicating weaknesses, will require a conscious, well thought-out and swift strategy to protect itself from competition and subsequent losses. This must also be applied to the Gekko product, to ensure its success and grow Eco-Flex’s overall market share. COMPETITIVE ANALYSIS When comparing Eco-Flex to its notable competitors, there are many similarities in terms of market and product, with the notable exception of a wood-faced gymnasium product such as Gekko. These competitors therefore have the ability to not only compete with Eco-Flex’s current products, but also to create a product that can be comparable to Gekko. Legal/patent considerations aside, this is a critical element that Eco-Flex must consider should they move forward with Gekko production and its associated market launch. Another important factor is that Eco-Flex uses a dealer and reseller network to resale and install product – these resellers have a diverse, non-exclusive bouquet of products which actually compete with Eco-Flex’s products. While this is a normal, accepted practice, Eco-Flex and Gekko must compete within this scenario. It also makes competitive analysis (in terms of manufacturing competition vs. product competition) difficult to easily assess. 3 | P a g e
Eco-Flex 1 1.) Ecoflex Safety Flooring 2, 3 (India) 4, 5 2.) RB Rubber Products 6, 7, 8 3.) Ecore International 4.) Zebra Mats (Canada) 9 Average Years Location Produced Approx. Product Range Approx. Tires Recycled P/A Over 30 years Near Edmonton, Alberta 25 12 million tires P/A. Over 50 years (1960) Over 25 years (1985) Over 40 years (1989) Over 10 years (1997) Mumbai, India Under 10 6 million tires P/A. McMinnville, OR Over 30 Over a millions pounds P/A Lancaster, Pennsylvania 16 4 million tires P/A Toronto, Ontario Over 30 Not Available References: 1. (Graphos, 2011); 2. (EcoFlex); 3. (Ride4ever, 2010); 4. (Incorporated, 2011); 5. (Consulting); 6. (Flooring, 2011); 7. (Businessweek); 8. (International, Sport and Recreation Surfacing); 9. (Canada Z. M., 2009) While the above chart looks at rubber flooring manufacturers, it is clear that Gekko will compete against producers and installers of “traditional” wooden gymnasium flooring. These are usually solid wood or parquet installations installed only in higher-end sports facilities due to high price and maintenance costs, and not in free-weight areas or harsh environments due to their weaker surface properties. However they offer the lateral and vertical flex required by gymnasium sports persons (dancers, basketball, gymnastics etc.) With this in mind, Eco-flex’s Gekko will have several advantages over its competitors (standard wood flooring products): Improved life span (15 years before replacement or refurbishing vs. 3-5 years on wooden floors) Bamboo backing with rubber substrate is unique, combines attractive design with durability and comfort Has a competitive advantage thanks to Eco-Flex’s large existing client base Is inexpensive and easy to install, even by home users (end consumers) and replace panels The chart below exhibits indicative pricing in regards to vinyl, synthetic, and wood flooring. Eco-Flex is competing to replace wood flooring in places such as gyms and the chart below demonstrates how much it currently costs and how long the flooring is expected to last. The inserted chart is indicative pricing of a large competitor, a producer and installer of wooden gymnasium/sporting flooring (GROUP, 1997). The above chart shows how a 465m 2 floor has an initial outlay cost of $65,000.00, and is quoted as lasting up to 50 years. However, one must remember that this floor wood require stripping, sanding, repainting and refinishing every 3 years at a cost of approximately $8,000.00 (GROUP, 1997). If we extrapolate this into a comparative cost against Gekko’s 15 year life span, the total cost of ownership would be approximately $105,000.00. This further equates to a price of approximately $225.00 per square metre of wooden flooring. 4 | P a g e
Page 1 and 2: Eco-Flex Gekko Pricing Strategy Ups
Page 3: OBJECTIVE The objective of this rep
Page 7 and 8: POTENTIAL MARKET SEGMENTS In terms
Page 9 and 10: SOLUTION The alternative that will

Upstream Marketing November 2011

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