Sealed Air Corporation

Executive Summary:
Sealed Air has prided itself in being the market leader in technology for packaging. They developed the first closed-cell lightweight cushioning, and are seen as the market leader. They have a patent for the coated air bubble, which is the only coated bubble available for sale in America. This coated bubble has much stronger resistance and protection than the typical air bubble, as shown on the cushioning curve in exhibit 2. Sealed Air has also educated the market on their technology, so most clients don’t mind paying extra for the improved technology. They have recently encountered competition from a small firm that is selling uncoated air bubbles for a lower price than Sealed Air. This case analyzes the problem and the various steps Sealed Air can possibly take to beat the competition. In conclusion, the best option for Sealed Air would be to invest in uncoated bubbles as a sub brand of Sealed Air.

I. BACKGROUND

Introduction
Sealed Air’s registered trademark name for it’s protective packaging materials was AirCap. The feature that differentiated AirCap cushioning products from all of its competitors was its barrier coating technology which greatly increased air retention, meaning less compression and better protection. Barrier coating and its customer benefits had been the central theme of Sealed Air’s AirCap cushioning for 10 years now. The three major segments for protective packaging market were positioning blocking, and bracing, flexible wraps and finally void fills. All AirCap cushioning was sold through distributors.

II. ANALYSIS

Problem Identification:
Sealed Air is considering if at all they should dive in to the uncoated bubbles market even though they are known for superior coated bubbles across the board due to recent competition in that department which is threatening to take away a good chunk of their market share in the United States and overseas. If the company were to invest in uncoated bubbles, they would have to specify timing, the marketing program for the new product, and any adjustments in policies for AirCap cushioning and Sealed Air’s other products.

Consumer Orientation:
Sealed Air produced the first ever foam packaging system and is the only producer of coated packaging bubbles in the United States. This is the identity that consumers see in Sealed Air. Product development is performed based on what the customer needs are. Some consumers purchase on performance of the product. Others purchased depending on how much it cost per square foot of the packaging. Sealed Air had good distributors who were also loyal to the brand.

Consumer and Brand Relationship:
Sealed Air was the first closed-cell and first place keeping packaging system. It is a major brand. Distributors kept an open line of communication with Sealed Air, so information and ordering for new products was done in an efficient manner. Cost reduction was the main selling point for the product when salespeople advertised the product. Because of the quick exchange of information, the consumer was also informed of the newest products and could also order them at a fast speed.

Company Capacities:
SealedAir seemed to cater to a wide variety of customers. They had developed 8 different grades of their coated packaging material, which catered to a range of items, from heavy machinery to delicate glass structures. Since the very beginning, SealedAir has tried to cater to customers’ needs. It was the first US company to trademark and sell the coated bubbles as packaging material.

Willingness to pay:
They also have a really good distribution system, and an understanding of the market especially in the United States. A close relationship with sales over the years allows them to obtain discounts. They have 8 diff grades so they cater to a lot more people.They had a good brand image – and therefore the willingness to pay more for the coated type because the consumers understood significance of the coating.

Collaborator Analysis:
The only collaborator SealedAir had was Astro. They licensed the company to use Sealed Air’s patented technology. Astro had become an important competitor since, in addition to the coated bubble material, they provided customers with the choice of buying uncoated bubble materials.

Alternative Analysis: There are several things that Sealed Air could do in order to combat the problems that they are having with their competitors.

One alternative could be to create a sub brand of lower quality uncoated bubbles. This would allow them to enter the market of the cheaper type of air bubbles without losing their spot as the sole supplier of the coated bubbles which has the advanced technology. This would also allow them to potentially enter foreign markets and be competitive, since the European thought about packaging is that it is an unnecessary expenditure. The creating of a sub brand would not hurt the main brand’s reputation as the leader in industry and could be a good choice of action for Sealed Air to compete against the cheaper brands as well as providing the upscale product.

Another option would be to buy out the lower end companies. This could cause an issue in the ethical sense as Sealed Air would be looked at as a monopoly, but sub-contracting the competitors that are using Airpak technology could help the brand.

Conclusion: Our team feels that the best thing that Sealed Air could do is to create a sub brand for uncoated bubbles that would satisfy the market’s demand for cheaper bubbles and also hinder their competition. This would accomplish some things that they find important as a company and at the same time maintain their standing as the industry leader in bubble making technology.