Marketing Strategy in Industries with Overcapacity

by Irving Abramowitz, James Hauk



The article focuses on the problems of the industry whose major product is entering the stagnation stage of the cycle, and whose manufacturing capabilities are far in excess of the present. Authors presents case of the polyethylene pipes industry to study these problems. The extensive of plastic materials for piping can be traced to the period immediately following World War II. The initial application was in the coal fields, for pumping water under low pressures. The market for polyethylene pipe expanded greatly to include farm irrigation, water well, lawn sprinkler, and many other low pressure uses under 100 pounds per square inch. As new applications developed the supply of raw materials also grew, particularly since polyethylene was being used in the production of such things as packaging, sheeting, and bottles. As the industry grew, there were no standards as to dimensions and as to how the pipe should perform. The dimensions, materials, and performances varied by manufacturer. Moreover, accurate quality evaluation by the consumer was difficult, if not impossible, at least at the time of contemplated purchase.

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