The following section focuses on the of marketing for American International Group Inc where the company's consumers, rivals and core competencies have examined in order to validate whether the decision to launch Case Study Help under American International Group Inc trademark name would be a feasible option or not. We have to start with looked at the type of customers that American International Group Inc deals in while an assessment of the competitive environment and the business's strengths and weak points follows. Embedded in the 3C analysis is the reason for not releasing Case Study Help under American International Group Inc name.
American International Group Inc consumers can be segmented into 2 groups, last consumers and commercial consumers. Both the groups use American International Group Inc high performance adhesives while the company is not only associated with the production of these adhesives but likewise markets them to these consumer groups. There are two kinds of products that are being sold to these potential markets; instant adhesives and anaerobic adhesives. We would be focusing on the customers of immediate adhesives for this analysis considering that the market for the latter has a lower capacity for American International Group Inc compared to that of instantaneous adhesives.
The total market for instant adhesives is around 890,000 in the United States in 1978 which covers both client groups which have actually been determined earlier.If we look at a breakdown of American International Group Inc prospective market or customer groups, we can see that the business offers to OEMs (Initial Equipment Manufacturers), Do-it-Yourself consumers, repair and overhauling companies (MRO) and manufacturers dealing in products made from leather, plastic, metal and wood. This diversity in clients recommends that American International Group Inc can target has numerous options in regards to segmenting the market for its new product especially as each of these groups would be requiring the very same kind of item with respective modifications in need, quantity or product packaging. Nevertheless, the customer is not price sensitive or brand mindful so launching a low priced dispenser under American International Group Inc name is not a recommended choice.
American International Group Inc is not just a maker of adhesives but takes pleasure in market leadership in the instant adhesive industry. The business has its own skilled and competent sales force which adds value to sales by training the business's network of 250 suppliers for helping with the sale of adhesives.
Core skills are not limited to adhesive production just as American International Group Inc also concentrates on making adhesive dispensing equipment to assist in making use of its products. This double production method gives American International Group Inc an edge over competitors considering that none of the rivals of dispensing equipment makes instantaneous adhesives. In addition, none of these rivals sells straight to the customer either and uses distributors for connecting to clients. While we are taking a look at the strengths of American International Group Inc, it is important to highlight the business's weak points as well.
The company's sales personnel is experienced in training suppliers, the truth remains that the sales team is not trained in selling devices so there is a possibility of relying greatly on distributors when promoting adhesive devices. It must also be kept in mind that the suppliers are revealing reluctance when it comes to selling equipment that requires maintenance which increases the obstacles of offering devices under a particular brand name.
The business has actually items aimed at the high end of the market if we look at American International Group Inc item line in adhesive devices particularly. If American International Group Inc sells Case Study Help under the exact same portfolio, the possibility of sales cannibalization exists. Offered the fact that Case Study Help is priced lower than American International Group Inc high-end line of product, sales cannibalization would certainly be impacting American International Group Inc sales profits if the adhesive equipment is offered under the company's brand name.
We can see sales cannibalization impacting American International Group Inc 27A Pencil Applicator which is priced at $275. If Case Study Help is released under the company's brand name, there is another possible danger which could reduce American International Group Inc profits. The truth that $175000 has been spent in promoting SuperBonder suggests that it is not a great time for introducing a dispenser which can highlight the reality that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instantaneous adhesive.
Furthermore, if we look at the marketplace in general, the adhesives market does disappoint brand orientation or price awareness which offers us 2 extra reasons for not launching a low priced product under the business's brand.
The competitive environment of American International Group Inc would be studied by means of Porter's five forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the purchaser in this market is low specifically as the buyer has low understanding about the product. While companies like American International Group Inc have handled to train suppliers relating to adhesives, the final customer depends on suppliers. Approximately 72% of sales are made directly by manufacturers and distributors for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Provided the reality that the adhesive market is controlled by 3 gamers, it could be stated that the provider takes pleasure in a greater bargaining power compared to the purchaser. The fact remains that the provider does not have much impact over the buyer at this point particularly as the buyer does not reveal brand name acknowledgment or rate level of sensitivity. When it comes to the adhesive market while the purchaser and the manufacturer do not have a significant control over the actual sales, this suggests that the distributor has the higher power.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry shown by foreign Japanese competitors in the immediate adhesive market shows that the market permits ease of entry. Nevertheless, if we take a look at American International Group Inc in particular, the business has dual capabilities in regards to being a maker of adhesive dispensers and instant adhesives. Prospective risks in devices giving market are low which reveals the possibility of creating brand awareness in not only instantaneous adhesives however also in giving adhesives as none of the industry players has actually handled to place itself in double abilities.
Threat of Substitutes: The hazard of replacements in the immediate adhesive market is low while the dispenser market in particular has substitutes like Glumetic idea applicators, built-in applicators, pencil applicators and sophisticated consoles. The fact remains that if American International Group Inc introduced Case Study Help, it would be enjoying sales cannibalization for its own products. (see appendix 1 for structure).
Despite the fact that our 3C analysis has actually given numerous reasons for not launching Case Study Help under American International Group Inc name, we have a suggested marketing mix for Case Study Help offered below if American International Group Inc decides to go on with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor automobile services' for a number of factors. This market has an extra growth potential of 10.1% which may be a great sufficient niche market segment for Case Study Help. Not just would a portable dispenser offer convenience to this specific market, the truth that the Do-it-Yourself market can likewise be targeted if a safe and clean low priced adhesive is being offered for usage with SuperBonder.
Price: The suggested price of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or via direct selling. A price listed below $250 would not require approvals from the senior management in case a mechanic at a motor lorry maintenance shop needs to acquire the product on his own.
American International Group Inc would only be getting $157 per unit as displayed in appendix 2 which provides a breakdown of gross profitability and net profitability for American International Group Inc for introducing Case Study Help.
Place: A circulation model where American International Group Inc straight sends out the product to the local distributor and keeps a 10% drop shipment allowance for the distributor would be used by American International Group Inc. Given that the sales group is currently engaged in selling instant adhesives and they do not have proficiency in selling dispensers, involving them in the selling procedure would be costly especially as each sales call expenses approximately $120. The distributors are already selling dispensers so selling Case Study Help through them would be a beneficial choice.
Promotion: A low marketing budget plan must have been assigned to Case Study Help but the reality that the dispenser is an innovation and it requires to be marketed well in order to cover the capital expenses sustained for production, the recommended advertising plan costing $51816 is suggested for initially introducing the item in the market. The prepared ads in publications would be targeted at mechanics in car upkeep stores. (Suggested text for the advertisement is displayed in appendix 3 while the 4Ps are summarized in appendix 4).