PST Tape Essay

3749 Words Dec 24th, 2014 15 Pages
For the exclusive use of A. Zaveri

9-914-533
JANUARY 28, 2014

ROBERT J. DOLAN
HEATHER BECKHAM

In a Bind: Peak Sealing Technologies’ Product Line
Extension Dilemma
It was a scorching hot day in July 2013 as Emma Taylor arrived at her office in Peak Sealing
Technologies’ Dallas, Texas corporate headquarters. Taylor had been with Peak Sealing Technologies
(PST) for six years since earning her MBA. She was the product manager for K2-Tape, the company’s premium pressure sensitive carton sealing tape line. Recently, a small regional tape producer had found some success with a cheaper, economy grade version that lacked the patented adhesive technology and high quality materials that K2-Tape products offered. Some members of PST’s
executive
…show more content…
The K2-Tape formulation delivered a higher level of performance versus standard hot melt/BOPP film3 backing that was used by many K2-Tape competitors. K2-Tape’s polyester film backing provided more durability, holding force, and higher heat/cold resistance than BOPP film and was suited for more challenging sealing applications. The K2-Tape product value proposition focused on the lowest overall cost to the end user through superior performance. In-house testing provided extensive comparative data illustrating K2-Tape’s exceptional performance under wide-ranging conditions.
There were many competitive tape products in the market. Carton sealing tape was available in a variety of strengths, widths, thickness, adhesives and backing materials. K2-Tape offered the most advanced adhesive technology, but often competed against inferior, economy grade products like those produced by Ipack. Ipack tapes were lower quality, BOPP backed products that lacked K2Tape’s strength and consistent performance, but end-user pricing was often 25-35% below K2-Tape.
Exhibit 2 provides end user prices for select Ipack tapes. In 2012, K2-Tape sales were approximately
$68.6 million (Table A provides K2-Tape annual sales figures), compared to Ipack sales of $28.5 million in 2012.
Table A

Annual K2-Tape Sales (in Millions)
2008

2009

2010

2011

2012

$39.6

$44.4

$49.9

$57.5

$68.6

Tensile, a new Waltham, Massachusetts based competitor, offered an economy BOPP film backed
Open Document