Croft Case Study

1266 Words6 Pages
SP-3, Croft Industries In January 1991, the director of sales and the director of planning and administration of Croft Industries met to prepare a joint recommendation to the president on the pricing of the firm's line of asphalt shingles. Croft Industries had been a price leader over the years: when the firm announced its price on asphalt shingles, competitive manufacturers followed. However, Croft had announced and implemented a price increase on January 1, 1989, and this time competitors did not follow suit. The firm had since experienced a measurable decline in market share. Approximately 80 percent of the homes in Croft's region have asphalt shingles. About 90 percent of the homeowners contracting for new roofs use asphalt shingles. Nevertheless, the market for shingles has plateaued in recent years because of depressed conditions in new home construction and a lower incidence of reroofing owing to uncertain economic conditions. Sales and marketing efforts for asphalt shingles focus on roofing material distributors. Distributors provide a warehousing function for shingle manufacturers and sell shingles to roofing contractors or applicators who install the shingles. Croft Industries is a major manufacturer of asphalt shingles for single-family houses. Company sales in 1990 were $10 million. The company’s line of asphalt shingles is highly regarded by roofing material applicators in its region, and virtually all major distributors carry the company's line. None of its competitors have distribution through more than half of the distributors in the region. The company had enjoyed a leadership position in its region because large, national producers of shingles (for example, GAF Corporation and Georgia-Pacific Corporation) did not have manufacturing facilities in the region. Costs of freight due to the weight of asphalt shingles precluded national

More about Croft Case Study

Open Document