The following section focuses on the of marketing for Honest Tea where the business's customers, rivals and core proficiencies have examined in order to justify whether the decision to release Case Study Help under Honest Tea trademark name would be a practical choice or not. We have actually firstly looked at the kind of customers that Honest Tea deals in while an examination of the competitive environment and the business's weak points and strengths follows. Embedded in the 3C analysis is the validation for not releasing Case Study Help under Honest Tea name.
Both the groups use Honest Tea high efficiency adhesives while the business is not only involved in the production of these adhesives but also markets them to these client 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 Honest Tea compared to that of instantaneous adhesives.
The overall market for immediate adhesives is around 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 Honest Tea possible market or customer groups, we can see that the business sells to OEMs (Initial Equipment Makers), Do-it-Yourself consumers, repair work and revamping companies (MRO) and producers handling products made from leather, wood, plastic and metal. This variety in customers suggests that Honest Tea can target has numerous options in regards to segmenting the market for its brand-new item particularly as each of these groups would be needing the same type of product with particular modifications in demand, packaging or quantity. However, the client is not price delicate or brand name conscious so launching a low priced dispenser under Honest Tea name is not a recommended option.
Honest Tea is not simply a producer of adhesives however delights in market leadership in the immediate adhesive industry. The company has its own skilled and certified sales force which adds worth to sales by training the business's network of 250 suppliers for helping with the sale of adhesives. Honest Tea believes in unique distribution as shown by the reality that it has actually picked to sell through 250 suppliers whereas there is t a network of 10000 suppliers that can be checked out for expanding reach by means of suppliers. The business's reach is not restricted to The United States and Canada just as it also delights in international sales. With 1400 outlets spread all throughout The United States and Canada, Honest Tea has its internal production plants rather than utilizing out-sourcing as the preferred technique.
Core competences are not limited to adhesive production just as Honest Tea also focuses on making adhesive giving devices to facilitate using its products. This dual production method gives Honest Tea an edge over competitors since none of the rivals of dispensing equipment makes instantaneous adhesives. Additionally, none of these rivals sells straight to the customer either and uses distributors for reaching out to consumers. While we are looking at the strengths of Honest Tea, it is very important to highlight the business's weak points as well.
The company's sales personnel is knowledgeable in training suppliers, 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. It needs to also be noted that the distributors are showing hesitation when it comes to offering devices that requires maintenance which increases the difficulties of selling equipment under a particular brand name.
The business has actually items intended at the high end of the market if we look at Honest Tea product line in adhesive equipment particularly. If Honest Tea offers Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Offered the fact that Case Study Help is priced lower than Honest Tea high-end line of product, sales cannibalization would absolutely be impacting Honest Tea sales income if the adhesive equipment is offered under the company's trademark name.
We can see sales cannibalization affecting Honest Tea 27A Pencil Applicator which is priced at $275. There is another possible danger which might decrease Honest Tea revenue if Case Study Help is launched under the company's brand. The truth that $175000 has actually been spent in promoting SuperBonder suggests that it is not a great time for introducing a dispenser which can highlight the fact that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the immediate adhesive.
Furthermore, if we take a look at the market in general, the adhesives market does not show brand orientation or cost awareness which gives us 2 additional factors for not introducing a low priced item under the business's trademark name.
The competitive environment of Honest Tea would be studied through 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 business like Honest Tea have actually handled to train distributors regarding adhesives, the final customer depends on distributors. Approximately 72% of sales are made straight by makers and suppliers for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Provided the reality that the adhesive market is dominated by three gamers, it could be stated that the supplier takes pleasure in a higher bargaining power compared to the purchaser. Nevertheless, the fact remains that the supplier does not have much influence over the purchaser at this point specifically as the buyer does not show brand acknowledgment or price sensitivity. When it comes to the adhesive market while the maker and the buyer do not have a significant control over the real sales, this shows that the distributor has the greater power.
Threat of new entrants: The competitive environment with its low brand name commitment and the ease of entry revealed by foreign Japanese rivals in the instant adhesive market shows that the market enables ease of entry. If we look at Honest Tea in particular, the company has double capabilities in terms of being a manufacturer of instantaneous adhesives and adhesive dispensers. Potential risks in devices giving market are low which shows the possibility of developing brand name awareness in not only instantaneous adhesives however likewise in dispensing adhesives as none of the industry players has handled to position itself in dual abilities.
Hazard of Substitutes: The danger of substitutes in the instant adhesive industry is low while the dispenser market in particular has alternatives like Glumetic idea applicators, in-built applicators, pencil applicators and sophisticated consoles. The truth remains that if Honest Tea presented Case Study Help, it would be enjoying sales cannibalization for its own products. (see appendix 1 for structure).
Despite the fact that our 3C analysis has actually given various reasons for not introducing Case Study Help under Honest Tea name, we have actually a suggested marketing mix for Case Study Help provided below if Honest Tea decides to go on with the launch.
Product & Target Market: The target market selected for Case Study Help is 'Motor lorry services' for a number of reasons. This market has an additional growth capacity of 10.1% which might be a good enough specific niche market sector for Case Study Help. Not just would a portable dispenser offer benefit to this particular market, the fact that the Diy market can also be targeted if a safe and clean low priced adhesive is being offered for usage with SuperBonder.
Price: The recommended price of Case Study Help has been kept at $175 to the end user whether it is sold through suppliers or through direct selling. This price would not include the cost of the 'vari idea' or the 'glumetic pointer'. A price listed below $250 would not require approvals from the senior management in case a mechanic at an automobile maintenance shop requires to buy the item on his own. This would increase the possibility of affecting mechanics to buy the item for usage in their everyday maintenance jobs.
Honest Tea would just be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross profitability and net success for Honest Tea for launching Case Study Help.
Place: A distribution model where Honest Tea straight sends out the item to the local supplier and keeps a 10% drop delivery allowance for the distributor would be utilized by Honest Tea. Because the sales group is currently taken part in selling immediate adhesives and they do not have know-how in offering dispensers, including them in the selling process would be costly specifically as each sales call costs approximately $120. The suppliers are currently selling dispensers so offering Case Study Help through them would be a beneficial alternative.
Promotion: A low marketing spending plan needs to have been assigned to Case Study Help but the truth that the dispenser is an innovation and it needs to be marketed well in order to cover the capital expenses sustained for production, the suggested advertising plan costing $51816 is recommended for initially presenting the product in the market. The planned ads in publications would be targeted at mechanics in vehicle upkeep stores. (Recommended text for the ad is displayed in appendix 3 while the 4Ps are summed up in appendix 4).