The following section concentrates on the of marketing for Houghton Mifflin Harcourt where the company's customers, rivals and core competencies have assessed in order to justify whether the decision to release Case Study Help under Houghton Mifflin Harcourt trademark name would be a practical option or not. We have actually to start with looked at the kind of clients that Houghton Mifflin Harcourt handle while an examination of the competitive environment and the company's weaknesses and strengths follows. Embedded in the 3C analysis is the justification for not launching Case Study Help under Houghton Mifflin Harcourt name.
Both the groups utilize Houghton Mifflin Harcourt high performance adhesives while the company is not only involved in the production of these adhesives however also markets them to these consumer groups. We would be focusing on the consumers of instant adhesives for this analysis considering that the market for the latter has a lower capacity for Houghton Mifflin Harcourt compared to that of immediate adhesives.
The total market for instant adhesives is approximately 890,000 in the US in 1978 which covers both client groups which have actually been determined earlier.If we take a look at a breakdown of Houghton Mifflin Harcourt prospective market or consumer groups, we can see that the company sells to OEMs (Initial Equipment Manufacturers), Do-it-Yourself customers, repair and revamping companies (MRO) and makers dealing in items made of leather, metal, wood and plastic. This diversity in clients recommends that Houghton Mifflin Harcourt can target has numerous alternatives in regards to segmenting the market for its new item especially as each of these groups would be needing the same kind of product with respective changes in quantity, demand or packaging. The customer is not cost delicate or brand name mindful so launching a low priced dispenser under Houghton Mifflin Harcourt name is not an advised choice.
Houghton Mifflin Harcourt is not just a producer of adhesives however delights in market leadership in the immediate adhesive industry. The company has its own skilled and qualified sales force which includes value to sales by training the business's network of 250 suppliers for facilitating the sale of adhesives.
Core skills are not limited to adhesive manufacturing just as Houghton Mifflin Harcourt also focuses on making adhesive dispensing equipment to facilitate making use of its items. This dual production strategy provides Houghton Mifflin Harcourt an edge over competitors given that none of the rivals of giving devices makes instant adhesives. Furthermore, none of these rivals sells directly to the customer either and uses suppliers for reaching out to customers. While we are looking at the strengths of Houghton Mifflin Harcourt, it is important to highlight the company's weak points as well.
The business's sales personnel is proficient in training distributors, the truth remains that the sales group is not trained in selling devices so there is a possibility of relying heavily on suppliers when promoting adhesive equipment. Nevertheless, it must also be kept in mind that the distributors are revealing unwillingness when it comes to selling devices that needs servicing which increases the difficulties of offering equipment under a specific brand name.
The company has products aimed at the high end of the market if we look at Houghton Mifflin Harcourt product line in adhesive equipment especially. If Houghton Mifflin Harcourt offers Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Provided the fact that Case Study Help is priced lower than Houghton Mifflin Harcourt high-end line of product, sales cannibalization would definitely be affecting Houghton Mifflin Harcourt sales income if the adhesive equipment is offered under the company's brand name.
We can see sales cannibalization affecting Houghton Mifflin Harcourt 27A Pencil Applicator which is priced at $275. There is another possible risk which might lower Houghton Mifflin Harcourt profits if Case Study Help is launched under the company's brand. The reality that $175000 has actually been invested in promoting SuperBonder recommends 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 take a look at the marketplace in general, the adhesives market does disappoint brand orientation or rate awareness which provides us 2 extra factors for not launching a low priced item under the company's brand name.
The competitive environment of Houghton Mifflin Harcourt would be studied by means of Porter's five 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 Houghton Mifflin Harcourt have managed to train distributors relating to adhesives, the final consumer is dependent on suppliers. Around 72% of sales are made directly by makers and suppliers for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the truth that the adhesive market is controlled by three gamers, it could be stated that the supplier delights in 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 moment specifically as the buyer does not show brand name recognition or cost sensitivity. When it comes to the adhesive market while the manufacturer and the buyer do not have a major control over the actual sales, this indicates that the distributor has the greater power.
Threat of new entrants: The competitive environment with its low brand commitment and the ease of entry revealed by foreign Japanese rivals in the instantaneous adhesive market shows that the market enables ease of entry. However, if we look at Houghton Mifflin Harcourt in particular, the business has dual abilities in terms of being a producer of immediate adhesives and adhesive dispensers. Potential threats in equipment dispensing market are low which reveals the possibility of producing brand name awareness in not just instantaneous adhesives but also in dispensing adhesives as none of the market players has actually managed to place itself in dual capabilities.
Hazard of Substitutes: The danger of alternatives in the immediate adhesive industry is low while the dispenser market in particular has alternatives like Glumetic idea applicators, built-in applicators, pencil applicators and advanced consoles. The reality remains that if Houghton Mifflin Harcourt presented Case Study Help, it would be enjoying sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has provided numerous reasons for not launching Case Study Help under Houghton Mifflin Harcourt name, we have actually a recommended marketing mix for Case Study Help given listed below if Houghton Mifflin Harcourt chooses to go on with the launch.
Product & Target Market: The target audience picked for Case Study Help is 'Automobile services' for a number of reasons. There are currently 89257 facilities in this sector and a high use of roughly 58900 lbs. is being utilized by 36.1 % of the marketplace. This market has an additional development potential of 10.1% which may be a sufficient niche market sector for Case Study Help. Not only would a portable dispenser deal benefit to this particular market, the fact that the Do-it-Yourself market can likewise be targeted if a safe and clean low priced adhesive is being sold for usage with SuperBonder. The product would be sold without the 'glumetic suggestion' and 'vari-drop' so that the consumer can decide whether he wishes to go with either of the two accessories or not.
Price: The suggested rate of Case Study Help has actually been kept at $175 to the end user whether it is offered through suppliers or through direct selling. A price below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle upkeep shop requires to acquire the item on his own.
Houghton Mifflin Harcourt would only be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross profitability and net success for Houghton Mifflin Harcourt for launching Case Study Help.
Place: A circulation model where Houghton Mifflin Harcourt directly sends the product to the local supplier and keeps a 10% drop shipment allowance for the distributor would be utilized by Houghton Mifflin Harcourt. Considering that the sales group is currently engaged in offering immediate 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 around $120. The suppliers are currently offering dispensers so offering Case Study Help through them would be a beneficial option.
Promotion: Although a low advertising budget needs to have been appointed to Case Study Help but 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 suggested marketing plan costing $51816 is recommended for initially presenting the product in the market. The prepared advertisements in publications would be targeted at mechanics in vehicle maintenance stores. (Suggested text for the advertisement is shown in appendix 3 while the 4Ps are summarized in appendix 4).