The following area concentrates on the of marketing for Ho Chi Minh City where the business's consumers, competitors and core proficiencies have examined in order to validate whether the choice to release Case Study Help under Ho Chi Minh City brand name would be a feasible alternative or not. We have first of all taken a look at the type of customers that Ho Chi Minh City deals in while an assessment of the competitive environment and the business's weak points and strengths follows. Embedded in the 3C analysis is the reason for not launching Case Study Help under Ho Chi Minh City name.
Ho Chi Minh City customers can be segmented into 2 groups, commercial customers and last customers. Both the groups utilize Ho Chi Minh City high performance adhesives while the company is not just associated with the production of these adhesives however also markets them to these client groups. There are 2 kinds of products that are being offered to these potential markets; immediate adhesives and anaerobic adhesives. We would be focusing on the customers of instantaneous adhesives for this analysis since the market for the latter has a lower capacity for Ho Chi Minh City compared to that of immediate adhesives.
The total market for instantaneous adhesives is roughly 890,000 in the US in 1978 which covers both customer groups which have been recognized earlier.If we take a look at a breakdown of Ho Chi Minh City prospective market or customer groups, we can see that the business sells to OEMs (Initial Equipment Manufacturers), Do-it-Yourself clients, repair work and overhauling companies (MRO) and manufacturers handling products made of leather, plastic, wood and metal. This diversity in consumers recommends that Ho Chi Minh City can target has various choices in regards to segmenting the market for its new product specifically as each of these groups would be needing the exact same kind of item with respective modifications in product packaging, need or amount. However, the consumer is not cost sensitive or brand conscious so introducing a low priced dispenser under Ho Chi Minh City name is not a recommended alternative.
Ho Chi Minh City is not simply a maker of adhesives however enjoys market management in the instantaneous adhesive industry. The business has its own knowledgeable and qualified sales force which adds value to sales by training the company's network of 250 distributors for facilitating the sale of adhesives.
Core skills are not restricted to adhesive manufacturing only as Ho Chi Minh City likewise focuses on making adhesive giving equipment to help with making use of its products. This dual production method provides Ho Chi Minh City an edge over competitors since none of the rivals of dispensing devices makes instantaneous adhesives. In addition, none of these competitors offers straight to the customer either and utilizes suppliers for connecting to clients. While we are looking at the strengths of Ho Chi Minh City, it is crucial to highlight the business's weaknesses.
The business's sales personnel is skilled in training suppliers, the truth stays that the sales team is not trained in offering equipment so there is a possibility of relying greatly on suppliers when promoting adhesive devices. It needs to also be noted that the distributors are revealing reluctance when it comes to selling equipment that needs servicing which increases the obstacles of selling equipment under a particular brand name.
If we take a look at Ho Chi Minh City product line in adhesive devices especially, the company has actually products aimed at the high end of the marketplace. If Ho Chi Minh City offers Case Study Help under the same portfolio, the possibility of sales cannibalization exists. Given the truth that Case Study Help is priced lower than Ho Chi Minh City high-end product line, sales cannibalization would certainly be impacting Ho Chi Minh City sales earnings if the adhesive devices is offered under the company's brand name.
We can see sales cannibalization impacting Ho Chi Minh City 27A Pencil Applicator which is priced at $275. There is another possible hazard which might lower Ho Chi Minh City profits if Case Study Help is introduced under the business's brand. 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.
In addition, if we look at the market in general, the adhesives market does not show brand orientation or rate awareness which provides us 2 extra reasons for not introducing a low priced product under the company's brand name.
The competitive environment of Ho Chi Minh City would be studied by means of 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 especially as the buyer has low knowledge about the product. While companies like Ho Chi Minh City have managed to train suppliers concerning adhesives, the final consumer depends on distributors. Around 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: Given the reality that the adhesive market is controlled by 3 players, it could be stated that the supplier takes pleasure in a higher bargaining power compared to the buyer. However, the fact stays that the provider does not have much influence over the purchaser at this moment especially as the buyer does not show brand acknowledgment or price level of sensitivity. This indicates that the supplier has the greater power when it pertains to the adhesive market while the producer and the buyer do not have a major control over the actual sales.
Threat of new entrants: The competitive environment with its low brand name commitment and the ease of entry shown by foreign Japanese competitors in the instantaneous adhesive market shows that the marketplace allows ease of entry. Nevertheless, if we look at Ho Chi Minh City in particular, the business has dual abilities in regards to being a manufacturer of instantaneous adhesives and adhesive dispensers. Prospective risks in devices dispensing market are low which shows the possibility of producing brand name awareness in not only instantaneous adhesives however also in dispensing adhesives as none of the industry gamers has actually handled to place itself in double abilities.
Risk of Substitutes: The risk of alternatives in the instantaneous adhesive industry is low while the dispenser market in particular has alternatives like Glumetic suggestion applicators, in-built applicators, pencil applicators and sophisticated consoles. The reality remains that if Ho Chi Minh City 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 given numerous factors for not launching Case Study Help under Ho Chi Minh City name, we have actually a recommended marketing mix for Case Study Help offered below if Ho Chi Minh City chooses to proceed with the launch.
Product & Target Market: The target market selected for Case Study Help is 'Motor automobile services' for a number of factors. This market has an additional development capacity of 10.1% which might be a good sufficient specific niche market section for Case Study Help. Not only would a portable dispenser offer convenience to this particular market, the reality that the Diy market can also be targeted if a potable low priced adhesive is being sold for usage with SuperBonder.
Price: The suggested price of Case Study Help has actually been kept at $175 to the end user whether it is offered through suppliers or through direct selling. This price would not consist of the expense of the 'vari idea' or the 'glumetic pointer'. A price below $250 would not need approvals from the senior management in case a mechanic at an automobile maintenance store requires to buy the item on his own. This would increase the possibility of affecting mechanics to purchase the product for usage in their daily maintenance jobs.
Ho Chi Minh City would just be getting $157 per unit as displayed in appendix 2 which gives a breakdown of gross profitability and net success for Ho Chi Minh City for introducing Case Study Help.
Place: A distribution model where Ho Chi Minh City straight sends the product to the regional supplier and keeps a 10% drop delivery allowance for the distributor would be utilized by Ho Chi Minh City. Because the sales group is currently engaged in offering instant adhesives and they do not have competence in selling dispensers, including them in the selling procedure would be expensive especially as each sales call costs roughly $120. The distributors are currently selling dispensers so selling Case Study Help through them would be a beneficial alternative.
Promotion: A low promotional budget plan must have been appointed to Case Study Help however the reality that the dispenser is an innovation and it requires to be marketed well in order to cover the capital expenses sustained for production, the recommended advertising strategy costing $51816 is suggested for initially introducing the product in the market. The prepared ads in magazines 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).