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Congoleum Corp Case Study Solution
Congoleum Corp Case Study Help
Congoleum Corp Case Study Analysis
The following area focuses on the of marketing for Congoleum Corp where the company's customers, rivals and core competencies have examined in order to justify whether the choice to introduce Case Study Help under Congoleum Corp brand would be a possible choice or not. We have firstly taken a look at the kind of consumers that Congoleum Corp handle while an evaluation of the competitive environment and the company's weaknesses and strengths follows. Embedded in the 3C analysis is the validation for not introducing Case Study Help under Congoleum Corp name.
Both the groups utilize Congoleum Corp high efficiency adhesives while the business is not only included in the production of these adhesives however also markets them to these customer groups. We would be focusing on the customers of instantaneous adhesives for this analysis given that the market for the latter has a lower capacity for Congoleum Corp compared to that of instantaneous adhesives.
The total market for immediate adhesives is roughly 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 Congoleum Corp prospective market or client groups, we can see that the company offers to OEMs (Original Equipment Makers), Do-it-Yourself clients, repair work and upgrading business (MRO) and makers handling products made of leather, wood, plastic and metal. This diversity in customers recommends that Congoleum Corp can target has different options in terms of segmenting the market for its brand-new product particularly as each of these groups would be needing the same kind of product with respective changes in demand, amount or packaging. However, the customer is not cost delicate or brand name mindful so introducing a low priced dispenser under Congoleum Corp name is not a recommended option.
Congoleum Corp is not just a producer of adhesives however takes pleasure in market management in the instantaneous adhesive market. The company has its own competent and qualified sales force which includes worth to sales by training the business's network of 250 distributors for assisting in the sale of adhesives.
Core proficiencies are not restricted to adhesive manufacturing only as Congoleum Corp likewise concentrates on making adhesive giving equipment to assist in making use of its products. This double production method provides Congoleum Corp an edge over rivals considering that none of the rivals of giving devices makes instantaneous adhesives. Furthermore, none of these competitors sells directly to the consumer either and utilizes suppliers for connecting to consumers. While we are looking at the strengths of Congoleum Corp, it is essential to highlight the business's weaknesses.
Although the business's sales personnel is skilled in training distributors, the truth stays that the sales group is not trained in offering equipment so there is a possibility of relying greatly on suppliers when promoting adhesive equipment. It needs to likewise be kept in mind that the distributors are showing unwillingness when it comes to selling devices that requires maintenance which increases the challenges of selling devices under a specific brand name.
If we take a look at Congoleum Corp product line in adhesive equipment especially, the company has products targeted at the high-end of the marketplace. The possibility of sales cannibalization exists if Congoleum Corp sells Case Study Help under the same portfolio. Offered the reality that Case Study Help is priced lower than Congoleum Corp high-end line of product, sales cannibalization would certainly be affecting Congoleum Corp sales revenue if the adhesive devices is sold under the business's brand name.
We can see sales cannibalization impacting Congoleum Corp 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 decrease Congoleum Corp profits. The reality that $175000 has been spent in promoting SuperBonder recommends that it is not a good time for launching a dispenser which can highlight the fact that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instantaneous adhesive.
In addition, if we take a look at the marketplace in general, the adhesives market does not show brand name orientation or cost consciousness which gives us 2 extra reasons for not releasing a low priced product under the business's trademark name.
The competitive environment of Congoleum Corp 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 purchaser in this industry is low specifically as the purchaser has low knowledge about the item. While business like Congoleum Corp have actually handled to train distributors concerning adhesives, the last customer is dependent on suppliers. Approximately 72% of sales are made straight by manufacturers and distributors for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Given the truth that the adhesive market is dominated by 3 players, it could be stated that the provider enjoys a higher bargaining power compared to the buyer. The fact stays that the supplier does not have much impact over the purchaser at this point specifically as the purchaser does not show brand name recognition or price 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 indicates that the supplier has the greater power.
Threat of new entrants: The competitive environment with its low brand name commitment and the ease of entry shown by foreign Japanese rivals in the immediate adhesive market shows that the market permits ease of entry. Nevertheless, if we look at Congoleum Corp in particular, the company has dual abilities in terms of being a manufacturer of immediate adhesives and adhesive dispensers. Possible risks in equipment dispensing industry are low which reveals the possibility of producing brand awareness in not just immediate adhesives but also in dispensing adhesives as none of the market players has actually handled to place itself in double capabilities.
Hazard of Substitutes: The risk of substitutes in the instant adhesive market is low while the dispenser market in particular has substitutes like Glumetic suggestion applicators, in-built applicators, pencil applicators and sophisticated consoles. The truth stays that if Congoleum Corp presented Case Study Help, it would be enjoying sales cannibalization for its own items. (see appendix 1 for framework).
Despite the fact that our 3C analysis has actually given numerous factors for not introducing Case Study Help under Congoleum Corp name, we have actually a suggested marketing mix for Case Study Help provided below if Congoleum Corp decides to proceed with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor car services' for a number of factors. This market has an extra development potential of 10.1% which might be a great enough specific niche market segment for Case Study Help. Not only would a portable dispenser offer benefit to this specific market, the reality that the Do-it-Yourself market can also be targeted if a potable low priced adhesive is being sold for usage with SuperBonder.
Price: The recommended rate of Case Study Help has been kept at $175 to the end user whether it is sold through distributors or through direct selling. This price would not consist of the expense of the 'vari suggestion' or the 'glumetic tip'. A rate listed below $250 would not require approvals from the senior management in case a mechanic at an automobile upkeep shop needs to purchase the product on his own. This would increase the possibility of affecting mechanics to acquire the product for use in their daily maintenance jobs.
Congoleum Corp would just be getting $157 per unit as shown in appendix 2 which provides a breakdown of gross profitability and net profitability for Congoleum Corp for releasing Case Study Help.
Place: A circulation design where Congoleum Corp directly sends the item to the regional supplier and keeps a 10% drop shipment allowance for the distributor would be used by Congoleum Corp. Given that the sales team is already engaged in selling instant adhesives and they do not have competence in selling dispensers, involving them in the selling procedure would be pricey especially as each sales call costs around $120. The distributors are already selling dispensers so offering Case Study Help through them would be a favorable alternative.
Promotion: Although a low advertising spending plan must have been designated to Case Study Help however the reality that the dispenser is a development and it requires to be marketed well in order to cover the capital costs sustained for production, the recommended marketing plan costing $51816 is suggested for initially presenting the item in the market. The planned advertisements in magazines would be targeted at mechanics in automobile maintenance shops. (Recommended text for the ad is shown in appendix 3 while the 4Ps are summarized in appendix 4).
