Commercializing the Kunst 1600 Dry Piston Vacuum Pump

3. Construct a customer value model for the Kunst 1600 in the residential AC, home refrigerator and light commercial refrigerator repair market segments.

Ans.

Deciding Attributes

Residential AC repair segment

Home refrigerator repair segment

Light commercial refrigerator repair segment

Pump rating 3 CFM to 6 CFM 1 CFM 1.5 CFM

Pump Price (in $) $250 to $320 $150 $200

Expected life (in years) 2.5 years 3 years 2 years

Average spending per year on vacuum pump by repair firm owners (in $)

$100 to $128

$50

$100

Oil Price (in $) $8 (per quart of oil) $4 (per pint of oil) $4 (per pint of oil)

Scouring soap price (in $) $0.50 $0.50 $0.50

Towel price (in $) $0.15 $0.15 $0.15

Oil disposal cost (in $) $1.25 = $5*1/4 gallon(@ 5$ per gallon disposal charge) $0.625 = $5*1/8 gallon(@ 5$ per gallon disposal charge) $0.625 = $5*1/8 gallon(@ 5$ per gallon disposal charge)

Labor cost on changing oil (in $) $15 =$30*1/2 hour (@ 30$ per hour by repair technician) $7.5 =$15*1/2 hour (@ 15$ per hour by repair technician) $12 =$24*1/2 hour (@ 24$ per hour by repair technician)

Savings on Oil change per job (in $) 8+0.5+0.15+1.25+15

=$24.9 4+0.5+0.15+0.625+7.5

=$12.775 4+0.5+0.15+0.625+12

=$17.275

No. of oil changes per year 20 times (@ oil is changed once a week in the season of 20 weeks) 12 times (@ oil is changed once a month) 12 times (@ oil is changed once a month)

Total savings on oil change (A) $24.9 * 20 times per year

= $498 $12.775 * 12 times per year

= $153.3 $17.275 * 12 times per year

= $207.3

Savings in time by employing Kunst 1600 Nil as Kunst 1600 doesn't reduce the vacuum time of 30 minutes Nil as the vacuum time of 15 minutes in repair job is already meager & reducing it doesn't save significant Reduce vacuuming time by 10 minutes from per job vacuum time of 30 minutes. Thereby increasing at least 2 more jobs per week

Profit per job (in $) $70 $10 $30

Increase in profit earned by employing Kunst 1600 (B)

Nil

Nil