The following area focuses on the of marketing for California Choppers where the business's consumers, rivals and core competencies have assessed in order to validate whether the decision to release Case Study Help under California Choppers trademark name would be a possible choice or not. We have first of all taken a look at the type of consumers that California Choppers deals in while an assessment of the competitive environment and the business's weaknesses and strengths follows. Embedded in the 3C analysis is the justification for not introducing Case Study Help under California Choppers name.
California Choppers clients can be segmented into 2 groups, industrial consumers and final consumers. Both the groups utilize California Choppers high performance adhesives while the company is not just involved in the production of these adhesives however likewise markets them to these customer groups. There are 2 types of items that are being offered to these potential markets; anaerobic adhesives and instant adhesives. We would be focusing on the consumers of immediate adhesives for this analysis given that the market for the latter has a lower potential for California Choppers compared to that of instant adhesives.
The overall market for instant adhesives is approximately 890,000 in the United States in 1978 which covers both client groups which have actually been identified earlier.If we take a look at a breakdown of California Choppers potential market or customer groups, we can see that the company sells to OEMs (Original Devices Makers), Do-it-Yourself customers, repair work and overhauling business (MRO) and manufacturers dealing in products made from leather, plastic, metal and wood. This diversity in customers suggests that California Choppers can target has different alternatives in regards to segmenting the marketplace for its new product particularly as each of these groups would be needing the exact same type of product with respective changes in demand, product packaging or quantity. The customer is not cost sensitive or brand mindful so introducing a low priced dispenser under California Choppers name is not a recommended choice.
California Choppers is not just a producer of adhesives but enjoys market leadership in the immediate adhesive market. The company has its own skilled and competent sales force which adds value to sales by training the company's network of 250 distributors for assisting in the sale of adhesives. California Choppers believes in special circulation as shown by the truth that it has actually selected to offer through 250 suppliers whereas there is t a network of 10000 distributors that can be explored for broadening reach via distributors. The company's reach is not restricted to The United States and Canada just as it likewise enjoys global sales. With 1400 outlets spread all across North America, California Choppers has its in-house production plants instead of utilizing out-sourcing as the preferred method.
Core skills are not restricted to adhesive production just as California Choppers also specializes in making adhesive dispensing devices to help with making use of its products. This double production strategy gives California Choppers an edge over rivals considering that none of the competitors of dispensing equipment makes instant adhesives. Furthermore, none of these competitors sells directly to the customer either and uses suppliers for connecting to consumers. While we are looking at the strengths of California Choppers, it is essential to highlight the company's weaknesses.
The company's sales staff is skilled in training suppliers, the fact stays that the sales team is not trained in selling devices so there is a possibility of relying heavily on suppliers when promoting adhesive devices. It must also be noted that the distributors are showing reluctance when it comes to offering devices that needs servicing which increases the difficulties of selling equipment under a particular brand name.
The company has items intended at the high end of the market if we look at California Choppers item line in adhesive equipment particularly. If California Choppers offers 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 California Choppers high-end product line, sales cannibalization would absolutely be affecting California Choppers sales revenue if the adhesive equipment is sold under the business's trademark name.
We can see sales cannibalization affecting California Choppers 27A Pencil Applicator which is priced at $275. If Case Study Help is launched under the company's brand name, there is another possible risk which could reduce California Choppers earnings. The fact that $175000 has been spent in promoting SuperBonder suggests that it is not a great time for introducing a dispenser which can highlight the truth that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instantaneous adhesive.
Furthermore, if we look at the market in general, the adhesives market does disappoint brand name orientation or price awareness which gives us 2 extra factors for not launching a low priced item under the company's brand name.
The competitive environment of California Choppers would be studied via Porter's five forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the purchaser in this industry is low particularly as the purchaser has low knowledge about the product. While business like California Choppers have handled to train suppliers regarding adhesives, the final customer is dependent on distributors. Approximately 72% of sales are made straight by producers and suppliers for instantaneous adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Offered the reality that the adhesive market is controlled by 3 gamers, it could be said that the supplier enjoys a greater bargaining power compared to the buyer. The reality stays that the supplier does not have much impact over the buyer at this point especially as the buyer does not reveal brand name acknowledgment or price sensitivity. This suggests that the distributor has the greater power when it comes to the adhesive market while the manufacturer and the purchaser do not have a significant control over the actual sales.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry revealed by foreign Japanese competitors in the immediate adhesive market indicates that the marketplace enables ease of entry. If we look at California Choppers in specific, the business has dual abilities in terms of being a maker of adhesive dispensers and immediate adhesives. Potential hazards in devices dispensing industry are low which reveals the possibility of producing brand awareness in not only instant adhesives but also in dispensing adhesives as none of the market players has managed to position itself in dual capabilities.
Risk of Substitutes: The threat of replacements in the immediate adhesive industry is low while the dispenser market in particular has replacements like Glumetic idea applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The fact remains that if California Choppers introduced Case Study Help, it would be indulging in sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has given various reasons for not launching Case Study Help under California Choppers name, we have actually a suggested marketing mix for Case Study Help provided listed below if California Choppers chooses to proceed with the launch.
Product & Target Market: The target audience picked for Case Study Help is 'Automobile services' for a variety of reasons. There are currently 89257 facilities in this section and a high use of around 58900 pounds. is being used by 36.1 % of the marketplace. This market has an additional growth potential of 10.1% which may be a sufficient specific niche market section for Case Study Help. Not just would a portable dispenser offer convenience to this specific market, the reality that the Do-it-Yourself market can also be targeted if a safe and clean low priced adhesive is being cost usage with SuperBonder. The item would be offered without the 'glumetic pointer' and 'vari-drop' so that the customer can decide whether he wants to go with either of the two devices or not.
Price: The suggested rate of Case Study Help has actually been kept at $175 to the end user whether it is offered through suppliers or via direct selling. This rate would not consist of the expense of the 'vari tip' or the 'glumetic pointer'. A price below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle maintenance store requires to purchase the product on his own. This would increase the possibility of influencing mechanics to purchase the item for use in their day-to-day maintenance jobs.
California Choppers would only be getting $157 per unit as shown in appendix 2 which provides a breakdown of gross profitability and net profitability for California Choppers for releasing Case Study Help.
Place: A distribution design where California Choppers straight sends the product to the regional supplier and keeps a 10% drop delivery allowance for the supplier would be utilized by California Choppers. Because the sales team is currently taken part in offering instant adhesives and they do not have know-how in selling dispensers, including them in the selling procedure would be expensive specifically as each sales call costs around $120. The distributors are currently offering dispensers so offering Case Study Help through them would be a beneficial option.
Promotion: Although a low advertising budget plan ought to have been designated to Case Study Help however the truth that the dispenser is a development and it needs to be marketed well in order to cover the capital expenses incurred for production, the suggested marketing strategy costing $51816 is suggested for at first presenting the item in the market. The planned advertisements in magazines would be targeted at mechanics in automobile upkeep stores. (Suggested text for the ad is shown in appendix 3 while the 4Ps are summed up in appendix 4).