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Kemp Foods Corp Case Study Solution
Kemp Foods Corp Case Study Help
Kemp Foods Corp Case Study Analysis
The following section concentrates on the of marketing for Kemp Foods Corp where the business's clients, rivals and core proficiencies have examined in order to validate whether the choice to introduce Case Study Help under Kemp Foods Corp trademark name would be a practical option or not. We have first of all taken a look at the type of consumers that Kemp Foods Corp deals in while an evaluation of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the validation for not releasing Case Study Help under Kemp Foods Corp name.
Kemp Foods Corp customers can be segmented into two groups, industrial customers and last customers. Both the groups utilize Kemp Foods Corp high performance adhesives while the company is not only associated with the production of these adhesives but also markets them to these customer groups. There are two types of items that are being offered to these potential markets; anaerobic adhesives and immediate adhesives. We would be focusing on the consumers of instantaneous adhesives for this analysis given that the market for the latter has a lower potential for Kemp Foods Corp compared to that of instantaneous adhesives.
The total market for instant adhesives is around 890,000 in the United States in 1978 which covers both customer groups which have been identified earlier.If we take a look at a breakdown of Kemp Foods Corp possible market or customer groups, we can see that the business offers to OEMs (Initial Equipment Makers), Do-it-Yourself customers, repair and revamping companies (MRO) and makers handling products made from leather, plastic, metal and wood. This variety in clients recommends that Kemp Foods Corp can target has various options in regards to segmenting the market for its brand-new product particularly as each of these groups would be requiring the very same kind of item with respective changes in amount, packaging or demand. The customer is not cost delicate or brand conscious so launching a low priced dispenser under Kemp Foods Corp name is not a recommended option.
Kemp Foods Corp is not simply a producer of adhesives however takes pleasure in market management in the instant adhesive market. The business has its own knowledgeable and certified sales force which includes worth to sales by training the company's network of 250 suppliers for facilitating the sale of adhesives. Kemp Foods Corp believes in unique distribution as indicated by the reality that it has actually picked to offer through 250 distributors whereas there is t a network of 10000 distributors that can be checked out for expanding reach by means of distributors. The business's reach is not restricted to The United States and Canada only as it likewise delights in worldwide sales. With 1400 outlets spread all across The United States and Canada, Kemp Foods Corp has its internal production plants instead of using out-sourcing as the favored strategy.
Core proficiencies are not restricted to adhesive production only as Kemp Foods Corp also specializes in making adhesive dispensing equipment to facilitate using its items. This dual production method provides Kemp Foods Corp an edge over rivals because none of the competitors of giving devices makes immediate adhesives. Furthermore, none of these rivals sells directly to the customer either and makes use of suppliers for connecting to customers. While we are taking a look at the strengths of Kemp Foods Corp, it is essential to highlight the company's weaknesses as well.
The company's sales staff is experienced in training suppliers, the truth remains that the sales team is not trained in offering devices so there is a possibility of relying greatly on suppliers when promoting adhesive devices. However, it must likewise be kept in mind that the distributors are revealing unwillingness when it pertains to selling equipment that requires servicing which increases the challenges of selling equipment under a particular trademark name.
If we look at Kemp Foods Corp product line in adhesive equipment especially, the business has items targeted at the high end of the marketplace. The possibility of sales cannibalization exists if Kemp Foods Corp offers Case Study Help under the exact same portfolio. Provided the fact that Case Study Help is priced lower than Kemp Foods Corp high-end product line, sales cannibalization would certainly be impacting Kemp Foods Corp sales revenue if the adhesive equipment is offered under the business's trademark name.
We can see sales cannibalization impacting Kemp Foods Corp 27A Pencil Applicator which is priced at $275. There is another possible risk which might reduce Kemp Foods Corp revenue if Case Study Help is released under the company's brand name. The truth that $175000 has actually been invested in promoting SuperBonder suggests that it is not a good time for releasing a dispenser which can highlight the reality that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instantaneous adhesive.
Additionally, if we look at the market in general, the adhesives market does not show brand name orientation or cost consciousness which provides us 2 additional factors for not releasing a low priced item under the business's trademark name.
The competitive environment of Kemp Foods Corp would be studied through Porter's five forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the purchaser in this industry is low specifically as the buyer has low understanding about the item. While business like Kemp Foods Corp have managed to train distributors regarding adhesives, the final customer is dependent on distributors. Roughly 72% of sales are made straight by makers and suppliers for instantaneous adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Offered the fact that the adhesive market is dominated by 3 gamers, it could be said that the supplier takes pleasure in a greater bargaining power compared to the buyer. The truth remains that the supplier does not have much impact over the purchaser at this point particularly as the buyer does not reveal brand name recognition or cost level of sensitivity. When it comes to the adhesive market while the producer and the purchaser do not have a significant control over the actual sales, this suggests that the supplier has the higher 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 immediate adhesive market shows that the marketplace permits ease of entry. If we look at Kemp Foods Corp in specific, the business has dual capabilities in terms of being a producer of adhesive dispensers and instant adhesives. Possible hazards in equipment dispensing industry are low which shows the possibility of producing brand name awareness in not only immediate adhesives but likewise in dispensing adhesives as none of the market gamers has handled to place itself in double abilities.
Risk of Substitutes: The hazard of replacements in the instant adhesive industry is low while the dispenser market in particular has replacements like Glumetic idea applicators, inbuilt applicators, pencil applicators and advanced consoles. The reality stays that if Kemp Foods Corp introduced Case Study Help, it would be indulging in sales cannibalization for its own products. (see appendix 1 for structure).
Despite the fact that our 3C analysis has actually provided different factors for not launching Case Study Help under Kemp Foods Corp name, we have actually a suggested marketing mix for Case Study Help given below if Kemp Foods Corp decides to go ahead 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 potential of 10.1% which may be a good sufficient specific niche market sector for Case Study Help. Not only would a portable dispenser offer convenience to this particular market, the fact that the Do-it-Yourself market can also be targeted if a drinkable low priced adhesive is being sold for use 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 distributors or through direct selling. This price would not consist of the cost of the 'vari idea' or the 'glumetic idea'. A rate listed below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle maintenance store requires to purchase the item on his own. This would increase the possibility of affecting mechanics to purchase the product for use in their day-to-day upkeep tasks.
Kemp Foods Corp would just be getting $157 per unit as displayed in appendix 2 which gives a breakdown of gross profitability and net profitability for Kemp Foods Corp for introducing Case Study Help.
Place: A distribution design where Kemp Foods Corp directly sends the product to the local distributor and keeps a 10% drop shipment allowance for the supplier would be used by Kemp Foods Corp. Considering that the sales team is already taken part in offering immediate adhesives and they do not have proficiency in selling dispensers, involving them in the selling process would be pricey especially as each sales call expenses roughly $120. The distributors are already offering dispensers so offering Case Study Help through them would be a favorable alternative.
Promotion: Although a low promotional spending plan must 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 expenses sustained for production, the recommended advertising plan costing $51816 is suggested for initially introducing the item in the market. The prepared advertisements in magazines would be targeted at mechanics in car upkeep stores. (Recommended text for the ad is shown in appendix 3 while the 4Ps are summed up in appendix 4).
