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UBC Theses and Dissertations

Study of the precision gases market in British Columbia Kidston, Hew Keith

Abstract

Union Carbide Canada Limited is one of four major industrial gas suppliers in Canada. Recently this firm contemplated entering the precision gases market as a supplier. However, lacking any detailed knowledge about this market, Union Carbide decided to have a market study made in order to provide the necessary information for planning a marketing program. This thesis presents a study of the precision (or specialty) gases market in British Columbia, an analysis of the findings, and a suggested approach to the marketing of precision gases in B.C. From information obtained from Union Carbide it was evident at the outset that precision gases are of a very specialized nature, and that total market demand for this type of product is limited compared to that for industrial gases. The company also indicated that the activities and interests of precision gas users are widely diversified. Because of these factors it was decided that a market survey should be conducted to determine some of the market characteristics, and that the survey should be conducted over 100 per cent of the known market population. Therefore, data was sought from all possible precision gas users in B.C., this data covering such points as: the particular gases being used; anticipated consumption; container requirements; and any expected changes in useage or in purchasing practices. Information was also obtained from some suppliers of precision gases in British Columbia. The data from the market survey were then studied to isolate pertinent market characteristics. It was soon confirmed that market demand is relatively small and users comprise a highly heterogeneous collection; forty-two users were found, ranging from small local businesses to giant international corporations, representing the fields of education, medicine, research and manufacturing. Market demand was found to cover a broad spectrum of product types--a total of seventy-five different gases are ordered in over two-hundred different ways most of them in very small amounts. However, further analysis of the data also revealed that of the 142,900 cubic feet of precision gases expected to be consumed in B.C. in 1969, 73 per cent is comprised of atmospheric gases and gas mixtures, most of which Union Carbide already handles for the industrial market; it also revealed that of these two types of precision gases, 96 per cent is used in standard industrial sized cylinders already used by Union Carbide. Thus by isolating those users purchasing atmospheric and mixed gases in industrial sized cylinders, Union Carbide can identify 70 per cent of the total market volume as a target market segment requiring a minimum of investment in new gases and facilities. Selection of channels of distribution for serving the above target market lead to consideration of the geographical density of the market population, and of the nature of the products and potential customers in question. It was decided that Union Carbide's existing direct-sales and distributor-sales forces are better suited to give effective sales coverage to this target market than any other alternative channels available to the company. The conclusion was, therefore, that Union Carbide should make use of its existing marketing organization to aim at the market segment using atmospheric and mixed gases in standard industrial sized cylinders.

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