Plasco, Inc. Henry Cole Robert E. Stevens David L. Loudon Plasco, Inc., is a relatively new player in the plastic extrusion industry. Plastic extrusion companies use granular compounds to make plastic materials for fabrications such as plastic tubing and sheeting. The key to the production of extrusion products is expensive extrusion machinery used to convert the compounds into material, which can be used in subsequent production processes. Efficient production requires long production runs, necessitating the need for a customer base of conversion companies (sometimes called fabricators) large enough to support long production runs. Plasco, Inc., is preparing to aggressively expand over the next two years but needs additional financing for the expansion. They have approached several potential sources for funds, but all the financial sources want some evidence of Plasco's potential to attract new customers. Plasco engaged a local marketing firm to provide this necessary information on market potential. The following are excerpts from the marketing report and the questionnaire.

STUDY OBJECTIVES:

The market research objectives were as follows:

I. Identify competitive suppliers of plastic extrusion products.

A. Number of suppliers

B. From which supplier do they make most of their purchases

II. Analyze strengths and weaknesses of these suppliers.

A.Rate overall satisfaction

B.Determine if any specific problems have been experienced

1. Quality of the goods

2. Quality of service

3. Cost

4. On-time delivery

5. Availability of goods

III. Determine what opportunities exist in the current plastic extrusion market for a new competitor.

IV. Determine the likelihood of existing plastic conversion companies purchasing from a new plastic extrusion company.

V. Determine what quantities and products the plastic conversion com- panies are interested in purchasing.

VI. Evaluate the importance of factors that have an influence over purchases.

A. Service quality

B. Cost

C. Transportation availability

D. Location of the supplier

E. Number of products available

F. Number of specialty products available

G. Size of the supplier

VII. Develop strategy implications of the results.

METHODOLOGY:

A sample was prepared from two databases. The first sample came from a list of eight prospective companies provided by Plasco. The second sample came from an electronic database categorized by NAICS (North American Industry Classification System) codes. Only those NAICS codes pertaining to plastic companies were selected. A total of 100 companies were interviewed.

The prospective customers were surveyed using a telephone questionnaire (see Figure C11.1). The questionnaire was administered using a trained interviewing staff.

Plasco personnel had final approval of the questionnaire. The information gathered from the structured telephone survey was edited, tabulated, and processed by computer to produce a comprehensive set of tables. This information provided percentages, mean scores, and cross-tabulations to understand relationships between variables.

DISCUSSION QUESTIONS

1. Assuming a diverse market for extrusion products, does the sampling plan reflect the information needs of Plasco, Inc.?

2. How will errors in the sampling plan affect results?Plasco, Inc. Henry Cole Robert E. Stevens David L. Loudon Plasco, Inc., is a relatively new player in the plastic extrusion industry. Plastic extrusion companies use granular compounds to make plastic materials for fabrications such as plastic tubing and sheeting. The key to the production of extrusion products is expensive extrusion machinery used to convert the compounds into material, which can be used in subsequent production processes. Efficient production requires long production runs, necessitating the need for a customer base of conversion companies (sometimes called fabricators) large enough to support long production runs. Plasco, Inc., is preparing to aggressively expand over the next two years but needs additional financing for the expansion. They have approached several potential sources for funds, but all the financial sources want some evidence of Plasco's potential to attract new customers. Plasco engaged a local marketing firm to provide this necessary information on market potential. The following are excerpts from the marketing report and the questionnaire.

STUDY OBJECTIVES:

The market research objectives were as follows:

I. Identify competitive suppliers of plastic extrusion products.

A. Number of suppliers

B. From which supplier do they make most of their purchases

II. Analyze strengths and weaknesses of these suppliers.

A.Rate overall satisfaction

B.Determine if any specific problems have been experienced

1. Quality of the goods

2. Quality of service

3. Cost

4. On-time delivery

5. Availability of goods

III. Determine what opportunities exist in the current plastic extrusion market for a new competitor.

IV. Determine the likelihood of existing plastic conversion companies purchasing from a new plastic extrusion company.

V. Determine what quantities and products the plastic conversion com- panies are interested in purchasing.

VI. Evaluate the importance of factors that have an influence over purchases.

A. Service quality

B. Cost

C. Transportation availability

D. Location of the supplier

E. Number of products available

F. Number of specialty products available

G. Size of the supplier

VII. Develop strategy implications of the results.

METHODOLOGY:

A sample was prepared from two databases. The first sample came from a list of eight prospective companies provided by Plasco. The second sample came from an electronic database categorized by NAICS (North American Industry Classification System) codes. Only those NAICS codes pertaining to plastic companies were selected. A total of 100 companies were interviewed.

The prospective customers were surveyed using a telephone questionnaire (see Figure C11.1). The questionnaire was administered using a trained interviewing staff.

Plasco personnel had final approval of the questionnaire. The information gathered from the structured telephone survey was edited, tabulated, and processed by computer to produce a comprehensive set of tables. This information provided percentages, mean scores, and cross-tabulations to understand relationships between variables.

DISCUSSION QUESTIONS

1. Assuming a diverse market for extrusion products, does the sampling plan reflect the information needs of Plasco, Inc.?

2. How will errors in the sampling plan affect results?

FIGURE C11.1. Survey Questionnaire Telephone number Person interviewed Interviewer Plasco, Inc. Am | speaking with the person responsible for purchasing? (If no, ask to speak to that person). Hello, my name is _. Would you please take a moment to answer a few questions? Any information you provide will be held in strict contr dence and will be combined with the answers of other participants in the survey. 1, Is your company primarily a: Plastics conversion company 1 Plastics extrusion company? Combination Others, please specify 2. How many plastic extrusion suppliers are you currently using? One! Five5 Two2 Six Three3 Seven or more? Four4 Nones (skip to #11) 3, From which plastic extrusion suppliers do you make most of your purchases? 4, How would you rate your overall satisfaction with your current suppliers? Very dissatisfied1 Somewhat dissatisfied2 Neither dissatisfied nor satisfied? Somewhat satisfied4 Very satisfieds 5, Have you experienced any problems with your plastic extrusion suppliers? Yes! No? (skip to question ?) 5. If yes, what specific types of problems have you experienced? (mark all that apply) Cost Size of the company Quality of the goods Quality of the service Availability of goodsFIGURE C11.1 (continued) 7, How likely would you be to purchase from another plastic extrusion sup- plier offering better quality and service? Very likely Likely2 Somewhat likely3 Not likely* (go to question 10) 8, Are there any plastic products that you are interested in purchasing that are not currently being supplied? Yes (ask what products) No? (skip to question 10) 9. What quantities would you purchase annually? 10, Please rate the importance of the following factors that may have influ- ence over your choice of plastic extrusion suppliers using a scale from 1 to 5, with 1 being the least important and 5 the most important. (a) Cost (b) Size of the supplier (c) Location of the supplier (d) Transportation availability (e) Service quality (f) Number of products available (g) Specialty products available 11, Is your company: Privately owned Publicly owned 12. What is your company's zip code? 13. How many plants does your company operate? 14. Which of the following categories most closely represents your company's annual sales volume? Under $100,0001 $100,000 to $500,0002 $500,001 to $ 1,000,0003 $1,000,001 to $5,000,0004 $5,000,001 to $10,000,0005 $10,000,001 to $50,000,0006 $50,000,001 to $100,000,0007 $100,000,001 and overe Refused/don't know Thank you for your time and cooperation