The following section concentrates on the of marketing for Congoleum Corp where the business's consumers, rivals and core competencies have assessed in order to validate whether the choice to launch Case Study Help under Congoleum Corp brand name would be a practical choice or not. We have first of all taken a look at the type of consumers that Congoleum Corp deals in while an assessment of the competitive environment and the business's weaknesses and strengths follows. Embedded in the 3C analysis is the validation for not introducing Case Study Help under Congoleum Corp name.
Congoleum Corp clients can be segmented into 2 groups, commercial clients and last consumers. Both the groups utilize Congoleum Corp high performance adhesives while the business is not just involved in the production of these adhesives but likewise markets them to these client groups. There are two kinds of products that are being offered to these potential markets; anaerobic adhesives and instant adhesives. We would be focusing on the customers of instantaneous adhesives for this analysis given that the marketplace for the latter has a lower potential for Congoleum Corp compared to that of instant adhesives.
The total market for immediate adhesives is approximately 890,000 in the US in 1978 which covers both consumer groups which have actually been determined earlier.If we look at a breakdown of Congoleum Corp potential market or customer groups, we can see that the business offers to OEMs (Original Equipment Producers), Do-it-Yourself consumers, repair and overhauling business (MRO) and manufacturers handling items made from leather, plastic, metal and wood. This diversity in customers recommends that Congoleum Corp can target has various choices in terms of segmenting the market for its new item specifically as each of these groups would be requiring the very same kind of product with particular changes in need, packaging or quantity. Nevertheless, the client is not cost delicate or brand conscious so launching a low priced dispenser under Congoleum Corp name is not a suggested choice.
Congoleum Corp is not just a producer of adhesives however delights in market leadership in the instantaneous adhesive market. The company has its own proficient and qualified sales force which includes worth to sales by training the company's network of 250 suppliers for helping with the sale of adhesives. Congoleum Corp believes in exclusive circulation as shown by the fact that it has picked to sell through 250 distributors whereas there is t a network of 10000 suppliers that can be explored for broadening reach via suppliers. The company's reach is not limited to The United States and Canada only as it also takes pleasure in global sales. With 1400 outlets spread all throughout The United States and Canada, Congoleum Corp has its internal production plants instead of using out-sourcing as the favored strategy.
Core skills are not limited to adhesive manufacturing only as Congoleum Corp also focuses on making adhesive dispensing devices to facilitate the use of its products. This double production strategy gives Congoleum Corp an edge over rivals given that none of the competitors of giving equipment makes immediate adhesives. In addition, none of these competitors sells straight to the customer either and utilizes distributors for reaching out to clients. While we are looking at the strengths of Congoleum Corp, it is essential to highlight the business's weaknesses also.
Although the company's sales personnel is knowledgeable in training distributors, the reality stays that the sales group is not trained in offering equipment so there is a possibility of relying greatly on distributors when promoting adhesive equipment. However, it needs to also be noted that the suppliers are revealing reluctance when it pertains to offering equipment that needs servicing which increases the difficulties of selling devices under a specific brand.
If we take a look at Congoleum Corp product line in adhesive equipment especially, the business has items targeted at the high end of the market. The possibility of sales cannibalization exists if Congoleum Corp sells Case Study Help under the same portfolio. Provided the reality that Case Study Help is priced lower than Congoleum Corp high-end line of product, sales cannibalization would absolutely be impacting Congoleum Corp sales profits if the adhesive equipment is sold under the business's brand.
We can see sales cannibalization impacting Congoleum Corp 27A Pencil Applicator which is priced at $275. There is another possible danger which might decrease Congoleum Corp revenue if Case Study Help is introduced under the business's trademark name. The fact that $175000 has actually been invested in promoting SuperBonder recommends that it is not a great time for launching a dispenser which can highlight the reality that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instant adhesive.
Furthermore, if we look at the marketplace in general, the adhesives market does disappoint brand name orientation or price consciousness which gives us two extra reasons for not launching a low priced item under the company's trademark name.
The competitive environment of Congoleum Corp would be studied through Porter's 5 forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the purchaser in this industry is low especially as the buyer has low understanding about the product. While business like Congoleum Corp have actually managed to train suppliers regarding adhesives, the final customer depends on suppliers. Around 72% of sales are made directly by makers and suppliers for immediate adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Provided the truth that the adhesive market is dominated by three players, it could be stated that the provider enjoys a higher bargaining power compared to the purchaser. The truth stays that the provider does not have much influence over the buyer at this point particularly as the buyer does not reveal brand acknowledgment or cost sensitivity. When it comes to the adhesive market while the producer and the purchaser do not have a major control over the real sales, this shows that the supplier 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 instantaneous adhesive market suggests that the marketplace enables ease of entry. Nevertheless, if we take a look at Congoleum Corp in particular, the business has double capabilities in terms of being a manufacturer of instant adhesives and adhesive dispensers. Possible risks in equipment dispensing market are low which reveals the possibility of developing brand name awareness in not just instantaneous adhesives but also in dispensing adhesives as none of the industry gamers has handled to position itself in double abilities.
Risk of Substitutes: The danger of substitutes in the instantaneous adhesive industry is low while the dispenser market in particular has replacements like Glumetic pointer applicators, built-in applicators, pencil applicators and sophisticated consoles. The reality remains that if Congoleum Corp presented Case Study Help, it would be delighting in sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has offered various reasons for not introducing Case Study Help under Congoleum Corp name, we have a suggested marketing mix for Case Study Help given listed below if Congoleum Corp decides to go ahead with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor lorry services' for a number of factors. This market has an extra development capacity of 10.1% which may be a good enough niche market section for Case Study Help. Not only would a portable dispenser deal benefit to this particular market, the fact that the Do-it-Yourself market can also be targeted if a drinkable low priced adhesive is being sold for usage with SuperBonder.
Price: The suggested cost of Case Study Help has been kept at $175 to the end user whether it is sold through suppliers or through direct selling. This rate would not include the cost of the 'vari tip' or the 'glumetic tip'. A rate listed below $250 would not require approvals from the senior management in case a mechanic at an automobile maintenance store requires to acquire the product on his own. This would increase the possibility of influencing mechanics to purchase the product for use in their daily upkeep jobs.
Congoleum Corp would just be getting $157 per unit as displayed in appendix 2 which gives a breakdown of gross success and net profitability for Congoleum Corp for introducing Case Study Help.
Place: A distribution design where Congoleum Corp straight sends the item to the local distributor and keeps a 10% drop shipment allowance for the distributor would be used by Congoleum Corp. Given that the sales team is already taken part in selling instant adhesives and they do not have competence in offering dispensers, including them in the selling process would be pricey particularly as each sales call expenses approximately $120. The distributors are currently offering dispensers so offering Case Study Help through them would be a favorable alternative.
Promotion: A low marketing spending plan should have been appointed to Case Study Help however the truth that the dispenser is an innovation and it needs to be marketed well in order to cover the capital costs sustained for production, the recommended advertising strategy costing $51816 is suggested for at first presenting the item in the market. The prepared advertisements in magazines would be targeted at mechanics in lorry upkeep stores. (Suggested text for the ad is displayed in appendix 3 while the 4Ps are summarized in appendix 4).