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Diamond Energy Resources Case Study Solution
Diamond Energy Resources Case Study Help
Diamond Energy Resources Case Study Analysis
The following section concentrates on the of marketing for Diamond Energy Resources where the company's clients, rivals and core competencies have actually evaluated in order to justify whether the decision to launch Case Study Help under Diamond Energy Resources brand would be a feasible option or not. We have to start with looked at the type of clients that Diamond Energy Resources handle while an evaluation of the competitive environment and the company's weak points and strengths follows. Embedded in the 3C analysis is the reason for not releasing Case Study Help under Diamond Energy Resources name.
Both the groups use Diamond Energy Resources high performance adhesives while the business is not only included in the production of these adhesives however likewise markets them to these customer groups. We would be focusing on the customers of instantaneous adhesives for this analysis considering that the market for the latter has a lower capacity for Diamond Energy Resources compared to that of instantaneous adhesives.
The total market for instantaneous adhesives is roughly 890,000 in the US in 1978 which covers both client groups which have actually been identified earlier.If we look at a breakdown of Diamond Energy Resources potential market or client groups, we can see that the business offers to OEMs (Initial Equipment Producers), Do-it-Yourself customers, repair work and upgrading companies (MRO) and producers handling products made of leather, plastic, metal and wood. This variety in consumers recommends that Diamond Energy Resources can target has different alternatives in regards to segmenting the marketplace for its new product especially as each of these groups would be requiring the very same type of item with respective changes in demand, amount or packaging. However, the consumer is not rate delicate or brand name mindful so introducing a low priced dispenser under Diamond Energy Resources name is not an advised alternative.
Diamond Energy Resources is not simply a maker of adhesives however takes pleasure in market management in the immediate adhesive market. The company has its own competent and certified sales force which includes worth to sales by training the business's network of 250 distributors for assisting in the sale of adhesives. Diamond Energy Resources believes in exclusive distribution as suggested by the truth that it has selected to offer through 250 distributors whereas there is t a network of 10000 suppliers that can be explored for expanding reach through suppliers. The business's reach is not restricted to North America just as it also enjoys international sales. With 1400 outlets spread out all throughout The United States and Canada, Diamond Energy Resources has its in-house production plants rather than utilizing out-sourcing as the preferred method.
Core competences are not restricted to adhesive manufacturing just as Diamond Energy Resources also specializes in making adhesive giving equipment to assist in using its items. This dual production technique offers Diamond Energy Resources an edge over rivals considering that none of the rivals of giving devices makes immediate adhesives. Additionally, none of these rivals sells straight to the consumer either and uses distributors for connecting to customers. While we are looking at the strengths of Diamond Energy Resources, it is important to highlight the company's weaknesses as well.
Although the company's sales personnel is knowledgeable in training suppliers, the fact stays that the sales group is not trained in offering equipment so there is a possibility of relying heavily on suppliers when promoting adhesive devices. Nevertheless, it must likewise be kept in mind that the suppliers are showing hesitation when it pertains to offering devices that requires maintenance which increases the challenges of selling devices under a specific brand.
The business has actually items intended at the high end of the market if we look at Diamond Energy Resources item line in adhesive equipment particularly. The possibility of sales cannibalization exists if Diamond Energy Resources offers Case Study Help under the same portfolio. Given the fact that Case Study Help is priced lower than Diamond Energy Resources high-end line of product, sales cannibalization would absolutely be affecting Diamond Energy Resources sales income if the adhesive equipment is sold under the business's brand name.
We can see sales cannibalization impacting Diamond Energy Resources 27A Pencil Applicator which is priced at $275. There is another possible threat which might lower Diamond Energy Resources profits if Case Study Help is launched under the business's trademark name. The fact that $175000 has actually been invested in promoting SuperBonder suggests that it is not a great time for releasing 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 not show brand orientation or cost consciousness which provides us 2 extra factors for not introducing a low priced product under the company's brand name.
The competitive environment of Diamond Energy Resources would be studied by means of 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 particularly as the purchaser has low knowledge about the item. While business like Diamond Energy Resources have managed to train suppliers concerning adhesives, the final consumer depends on distributors. Approximately 72% of sales are made directly by producers and distributors for instant adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the reality that the adhesive market is dominated by 3 players, it could be said that the provider enjoys a greater bargaining power compared to the buyer. However, the truth remains that the supplier does not have much influence over the buyer at this point particularly as the purchaser does disappoint brand recognition or price sensitivity. This suggests that the distributor has the higher power when it concerns the adhesive market while the purchaser and the producer do not have a major control over the actual sales.
Threat of new entrants: The competitive environment with its low brand commitment and the ease of entry revealed by foreign Japanese competitors in the instant adhesive market indicates that the market enables ease of entry. However, if we take a look at Diamond Energy Resources in particular, the company has dual capabilities in terms of being a manufacturer of adhesive dispensers and instantaneous adhesives. Potential threats in devices giving market are low which reveals the possibility of creating brand name awareness in not just immediate adhesives however also in giving adhesives as none of the market gamers has actually handled to place itself in dual capabilities.
Risk of Substitutes: The hazard of substitutes in the immediate adhesive industry is low while the dispenser market in particular has replacements like Glumetic suggestion applicators, built-in applicators, pencil applicators and sophisticated consoles. The truth remains that if Diamond Energy Resources presented 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 provided numerous reasons for not introducing Case Study Help under Diamond Energy Resources name, we have actually a recommended marketing mix for Case Study Help given below if Diamond Energy Resources chooses to proceed with the launch.
Product & Target Market: The target audience picked for Case Study Help is 'Automobile services' for a number of reasons. There are presently 89257 establishments in this sector and a high usage of roughly 58900 lbs. is being used by 36.1 % of the market. This market has an additional development capacity of 10.1% which may be a sufficient specific niche market section for Case Study Help. Not only would a portable dispenser offer benefit to this particular market, the reality that the Do-it-Yourself market can likewise be targeted if a potable low priced adhesive is being sold for use with SuperBonder. The product would be sold without the 'glumetic tip' and 'vari-drop' so that the consumer can choose whether he wishes to go with either of the two accessories or not.
Price: The suggested price of Case Study Help has been kept at $175 to the end user whether it is sold through distributors or by means of direct selling. A price listed below $250 would not need approvals from the senior management in case a mechanic at a motor lorry upkeep shop needs to purchase the product on his own.
Diamond Energy Resources would just be getting $157 per unit as shown in appendix 2 which gives a breakdown of gross success and net profitability for Diamond Energy Resources for releasing Case Study Help.
Place: A circulation design where Diamond Energy Resources directly sends out the item to the regional distributor and keeps a 10% drop delivery allowance for the distributor would be utilized by Diamond Energy Resources. Since the sales group is currently participated in selling instant adhesives and they do not have knowledge in offering dispensers, including them in the selling process would be expensive particularly as each sales call costs approximately $120. The suppliers are already offering dispensers so selling Case Study Help through them would be a beneficial option.
Promotion: A low promotional budget plan must have been designated to Case Study Help however the fact that the dispenser is a development and it requires to be marketed well in order to cover the capital costs incurred for production, the recommended advertising plan costing $51816 is recommended for at first presenting the product in the market. The prepared ads in publications would be targeted at mechanics in automobile upkeep stores. (Suggested text for the ad is displayed in appendix 3 while the 4Ps are summed up in appendix 4).
