The following section concentrates on the of marketing for Avon Products where the business's customers, competitors and core proficiencies have actually assessed in order to justify whether the decision to introduce Case Study Help under Avon Products brand name would be a feasible choice or not. We have first of all looked at the type of clients that Avon Products handle while an examination of the competitive environment and the company's strengths and weak points follows. Embedded in the 3C analysis is the validation for not releasing Case Study Help under Avon Products name.
Both the groups utilize Avon Products high efficiency adhesives while the company is not only involved in the production of these adhesives but likewise markets them to these consumer groups. 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 Avon Products compared to that of instantaneous adhesives.
The overall market for instant adhesives is approximately 890,000 in the US in 1978 which covers both customer groups which have actually been identified earlier.If we take a look at a breakdown of Avon Products potential market or consumer groups, we can see that the company offers to OEMs (Initial Devices Manufacturers), Do-it-Yourself consumers, repair work and overhauling business (MRO) and producers dealing in products made from leather, plastic, wood and metal. This diversity in clients suggests that Avon Products can target has different alternatives in terms of segmenting the marketplace for its brand-new product particularly as each of these groups would be needing the same kind of item with particular changes in amount, demand or product packaging. The client is not rate delicate or brand name conscious so introducing a low priced dispenser under Avon Products name is not a recommended option.
Avon Products is not simply a maker of adhesives however enjoys market management in the instantaneous adhesive market. The business has its own competent and competent sales force which includes value to sales by training the company's network of 250 distributors for facilitating the sale of adhesives. Avon Products believes in exclusive distribution as suggested by the fact that it has picked to sell through 250 suppliers whereas there is t a network of 10000 suppliers that can be explored for expanding reach via suppliers. The company's reach is not limited to North America only as it also delights in worldwide sales. With 1400 outlets spread all throughout The United States and Canada, Avon Products has its internal production plants rather than utilizing out-sourcing as the favored strategy.
Core skills are not restricted to adhesive production just as Avon Products also specializes in making adhesive dispensing equipment to facilitate the use of its products. This dual production technique provides Avon Products an edge over competitors given that none of the competitors of dispensing devices makes instant adhesives. In addition, none of these rivals offers directly to the customer either and uses distributors for reaching out to consumers. While we are looking at the strengths of Avon Products, it is necessary to highlight the business's weaknesses too.
The business's sales personnel is skilled in training distributors, the fact stays that the sales team is not trained in selling equipment so there is a possibility of relying heavily on suppliers when promoting adhesive devices. However, it should likewise be kept in mind that the suppliers are revealing hesitation when it pertains to offering devices that needs servicing which increases the difficulties of offering equipment under a specific brand.
The company has actually items aimed at the high end of the market if we look at Avon Products item line in adhesive devices particularly. If Avon Products sells Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Offered the fact that Case Study Help is priced lower than Avon Products high-end line of product, sales cannibalization would absolutely be impacting Avon Products sales earnings if the adhesive equipment is sold under the company's brand name.
We can see sales cannibalization affecting Avon Products 27A Pencil Applicator which is priced at $275. There is another possible hazard which could lower Avon Products income if Case Study Help is released under the business's brand name. The reality that $175000 has been spent in promoting SuperBonder recommends that it is not a great time for launching a dispenser which can highlight the truth that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instant adhesive.
Additionally, if we take a look at the market in general, the adhesives market does not show brand name orientation or price consciousness which offers us 2 additional reasons for not introducing a low priced item under the business's brand.
The competitive environment of Avon Products would be studied via Porter's 5 forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this industry is low specifically as the purchaser has low knowledge about the product. While business like Avon Products have managed to train suppliers regarding adhesives, the final customer is dependent on suppliers. Around 72% of sales are made straight by makers and distributors for immediate adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the truth that the adhesive market is controlled by three players, it could be stated that the provider enjoys a higher bargaining power compared to the purchaser. The fact remains that the supplier does not have much influence over the buyer at this point particularly as the purchaser does not reveal brand name recognition or price sensitivity. When it comes to the adhesive market while the purchaser and the producer do not have a significant control over the actual sales, this indicates that the supplier has the greater power.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry shown by foreign Japanese rivals in the instant adhesive market indicates that the marketplace enables ease of entry. If we look at Avon Products in specific, the business has dual capabilities in terms of being a producer of instantaneous adhesives and adhesive dispensers. Possible hazards in devices giving market are low which shows the possibility of creating brand name awareness in not only instant adhesives however likewise in dispensing adhesives as none of the market players has actually handled to place itself in double capabilities.
Risk of Substitutes: The danger of alternatives in the immediate adhesive industry is low while the dispenser market in particular has substitutes like Glumetic pointer applicators, in-built applicators, pencil applicators and advanced consoles. The reality remains that if Avon Products introduced Case Study Help, it would be enjoying sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has given different factors for not launching Case Study Help under Avon Products name, we have actually a recommended marketing mix for Case Study Help offered below if Avon Products decides to go ahead with the launch.
Product & Target Market: The target audience selected for Case Study Help is 'Motor vehicle services' for a variety of reasons. There are currently 89257 facilities in this sector and a high usage of approximately 58900 pounds. is being utilized by 36.1 % of the market. This market has an extra development potential of 10.1% which may be a good enough niche market sector for Case Study Help. Not only would a portable dispenser deal convenience to this specific market, the reality that the Diy market can also be targeted if a potable low priced adhesive is being cost use with SuperBonder. The item would be sold without the 'glumetic idea' and 'vari-drop' so that the consumer can decide whether he wants to opt for either of the two devices or not.
Price: The recommended rate of Case Study Help has been kept at $175 to the end user whether it is sold through distributors or via direct selling. A price below $250 would not require approvals from the senior management in case a mechanic at a motor automobile maintenance store needs to acquire the product on his own.
Avon Products would just be getting $157 per unit as shown in appendix 2 which provides a breakdown of gross profitability and net success for Avon Products for introducing Case Study Help.
Place: A distribution model where Avon Products straight sends the item to the local distributor and keeps a 10% drop delivery allowance for the supplier would be used by Avon Products. Since the sales team is already taken part in offering immediate adhesives and they do not have competence in offering dispensers, involving them in the selling procedure would be pricey especially as each sales call costs around $120. The suppliers are already offering dispensers so selling Case Study Help through them would be a beneficial option.
Promotion: A low marketing budget plan ought to have been designated to Case Study Help however the fact that the dispenser is a development and it needs to be marketed well in order to cover the capital expenses incurred for production, the recommended advertising strategy costing $51816 is advised for at first presenting the product in the market. The prepared ads in magazines would be targeted at mechanics in car maintenance stores. (Recommended text for the ad is shown in appendix 3 while the 4Ps are summed up in appendix 4).