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Dragon Beer Case Study Solution
Dragon Beer Case Study Help
Dragon Beer Case Study Analysis
The following area concentrates on the of marketing for Dragon Beer where the business's customers, competitors and core competencies have actually evaluated in order to validate whether the decision to release Case Study Help under Dragon Beer trademark name would be a feasible alternative or not. We have to start with looked at the type of clients that Dragon Beer handle while an assessment of the competitive environment and the company's strengths and weaknesses follows. Embedded in the 3C analysis is the justification for not launching Case Study Help under Dragon Beer name.
Dragon Beer clients can be segmented into 2 groups, final consumers and commercial consumers. Both the groups use Dragon Beer high performance adhesives while the business is not just associated with the production of these adhesives but likewise markets them to these client groups. There are 2 kinds of items that are being sold to these potential markets; instant adhesives and anaerobic adhesives. We would be concentrating on the consumers of instantaneous adhesives for this analysis given that the market for the latter has a lower capacity for Dragon Beer 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 been identified earlier.If we look at a breakdown of Dragon Beer prospective market or customer groups, we can see that the business sells to OEMs (Original Equipment Manufacturers), Do-it-Yourself customers, repair and overhauling business (MRO) and manufacturers handling products made of leather, wood, plastic and metal. This diversity in consumers recommends that Dragon Beer can target has different choices in terms of segmenting the marketplace for its new item especially as each of these groups would be requiring the same type of item with particular modifications in amount, need or packaging. Nevertheless, the consumer is not rate delicate or brand conscious so launching a low priced dispenser under Dragon Beer name is not a recommended choice.
Dragon Beer is not just a producer of adhesives but delights in market leadership in the instantaneous adhesive industry. The company has its own competent and qualified sales force which adds value to sales by training the company's network of 250 suppliers for facilitating the sale of adhesives. Dragon Beer believes in exclusive distribution as shown by the fact that it has actually chosen to offer through 250 distributors whereas there is t a network of 10000 suppliers that can be checked out for broadening reach via distributors. The business's reach is not restricted to North America just as it also takes pleasure in global sales. With 1400 outlets spread all throughout North America, Dragon Beer has its in-house production plants rather than using out-sourcing as the favored strategy.
Core skills are not restricted to adhesive production just as Dragon Beer likewise concentrates on making adhesive giving devices to facilitate the use of its items. This dual production method provides Dragon Beer an edge over rivals given that none of the rivals of giving devices makes immediate adhesives. Furthermore, none of these rivals sells directly to the consumer either and utilizes distributors for connecting to consumers. While we are looking at the strengths of Dragon Beer, it is essential to highlight the company's weak points also.
Although the company's sales personnel is experienced in training distributors, the reality stays that the sales team is not trained in offering devices so there is a possibility of relying heavily on distributors when promoting adhesive equipment. Nevertheless, it needs to likewise be noted that the suppliers are revealing reluctance when it concerns offering equipment that needs maintenance which increases the challenges of offering devices under a particular brand.
If we take a look at Dragon Beer product line in adhesive equipment especially, the company has actually items focused on the high-end of the marketplace. The possibility of sales cannibalization exists if Dragon Beer sells Case Study Help under the exact same portfolio. Given the truth that Case Study Help is priced lower than Dragon Beer high-end product line, sales cannibalization would certainly be affecting Dragon Beer sales earnings if the adhesive devices is sold under the company's brand.
We can see sales cannibalization affecting Dragon Beer 27A Pencil Applicator which is priced at $275. There is another possible risk which might decrease Dragon Beer income if Case Study Help is launched under the company's brand. The fact that $175000 has actually been spent in promoting SuperBonder suggests 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 instant adhesive.
In addition, if we take a look at the marketplace in general, the adhesives market does disappoint brand name orientation or price consciousness which provides us 2 extra reasons for not releasing a low priced item under the business's trademark name.
The competitive environment of Dragon Beer would be studied via Porter's 5 forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this market is low particularly as the purchaser has low understanding about the item. While companies like Dragon Beer have handled to train distributors regarding adhesives, the final consumer depends on distributors. Approximately 72% of sales are made straight by producers and distributors for immediate adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Offered the reality that the adhesive market is controlled by 3 players, it could be stated that the provider takes pleasure in a higher bargaining power compared to the purchaser. However, the reality remains that the supplier does not have much influence over the buyer at this point especially as the buyer does not show brand acknowledgment or price level of sensitivity. When it comes to the adhesive market while the purchaser and the producer do not have a major control over the actual sales, this indicates that the distributor has the higher power.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry revealed by foreign Japanese rivals in the instant adhesive market shows that the marketplace enables ease of entry. If we look at Dragon Beer in particular, the company has dual capabilities in terms of being a producer of adhesive dispensers and instant adhesives. Prospective hazards in devices dispensing market are low which shows the possibility of creating brand awareness in not only instant adhesives however also in giving adhesives as none of the industry players has handled to position itself in double capabilities.
Risk of Substitutes: The threat of substitutes in the instantaneous adhesive industry is low while the dispenser market in particular has substitutes like Glumetic suggestion applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The reality remains that if Dragon Beer introduced Case Study Help, it would be indulging in sales cannibalization for its own items. (see appendix 1 for framework).
Despite the fact that our 3C analysis has offered various factors for not launching Case Study Help under Dragon Beer name, we have actually a recommended marketing mix for Case Study Help provided listed below if Dragon Beer decides to proceed 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 growth potential of 10.1% which may be a great adequate specific niche market sector for Case Study Help. Not just would a portable dispenser deal convenience to this particular market, the reality that the Do-it-Yourself market can also be targeted if a drinkable low priced adhesive is being offered for use with SuperBonder.
Price: The suggested rate of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or through direct selling. A cost below $250 would not require approvals from the senior management in case a mechanic at a motor car maintenance shop needs to buy the product on his own.
Dragon Beer would only be getting $157 per unit as displayed in appendix 2 which gives a breakdown of gross profitability and net success for Dragon Beer for introducing Case Study Help.
Place: A distribution model where Dragon Beer directly sends out the product to the regional supplier and keeps a 10% drop delivery allowance for the supplier would be utilized by Dragon Beer. Since the sales group is currently taken part in offering instantaneous adhesives and they do not have proficiency in offering dispensers, involving them in the selling procedure would be expensive specifically as each sales call expenses roughly $120. The distributors are currently selling dispensers so selling Case Study Help through them would be a favorable option.
Promotion: Although a low promotional spending plan should have been designated to Case Study Help however the fact that the dispenser is an innovation and it requires to be marketed well in order to cover the capital costs sustained for production, the recommended marketing strategy costing $51816 is recommended for at first presenting the product in the market. The prepared advertisements in publications would be targeted at mechanics in car maintenance stores. (Suggested text for the advertisement is displayed in appendix 3 while the 4Ps are summarized in appendix 4).
