The following section focuses on the of marketing for Kemp Foods Corp where the company's consumers, competitors and core competencies have actually assessed in order to justify whether the decision to introduce Case Study Help under Kemp Foods Corp brand name would be a feasible alternative or not. We have firstly taken a look at the kind of clients that Kemp Foods Corp deals in while an assessment of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the validation for not launching Case Study Help under Kemp Foods Corp name.
Both the groups utilize Kemp Foods Corp high efficiency adhesives while the company is not only involved in the production of these adhesives but also markets them to these customer groups. We would be focusing on the customers of immediate adhesives for this analysis because the market for the latter has a lower potential for Kemp Foods Corp compared to that of instant adhesives.
The overall market for immediate adhesives is around 890,000 in the US in 1978 which covers both customer groups which have been determined 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 Manufacturers), Do-it-Yourself consumers, repair work and revamping business (MRO) and makers handling products made of leather, metal, wood and plastic. This variety in consumers suggests that Kemp Foods Corp can target has different alternatives in terms of segmenting the market for its new item particularly as each of these groups would be needing the very same kind of item with particular modifications in product packaging, demand or amount. The consumer is not cost sensitive or brand conscious so launching a low priced dispenser under Kemp Foods Corp name is not an advised choice.
Kemp Foods Corp is not just a producer of adhesives however delights in market leadership in the instantaneous adhesive market. The company has its own knowledgeable and competent sales force which adds worth to sales by training the company's network of 250 distributors for facilitating the sale of adhesives.
Core competences are not restricted to adhesive manufacturing only as Kemp Foods Corp likewise focuses on making adhesive dispensing equipment to assist in making use of its products. This double production technique gives Kemp Foods Corp an edge over competitors because none of the rivals of giving devices makes instant adhesives. In addition, none of these competitors sells directly to the consumer either and utilizes distributors for connecting to customers. While we are looking at the strengths of Kemp Foods Corp, it is important to highlight the company's weak points.
The business's sales staff is knowledgeable in training distributors, the fact stays that the sales team is not trained in selling devices so there is a possibility of relying greatly on suppliers when promoting adhesive devices. It needs to also be kept in mind that the suppliers are showing hesitation when it comes to selling equipment that requires maintenance which increases the difficulties of offering devices under a particular brand name.
The business has actually products intended at the high end of the market if we look at Kemp Foods Corp product line in adhesive devices particularly. If Kemp Foods Corp sells 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 Kemp Foods Corp high-end line of product, sales cannibalization would certainly be affecting Kemp Foods Corp sales earnings if the adhesive equipment is offered under the company's brand name.
We can see sales cannibalization affecting Kemp Foods Corp 27A Pencil Applicator which is priced at $275. If Case Study Help is introduced under the business's brand name, there is another possible hazard which could reduce Kemp Foods Corp earnings. The reality that $175000 has been spent in promoting SuperBonder recommends that it is not a great time for launching 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.
Additionally, if we take a look at the market in general, the adhesives market does not show brand orientation or rate consciousness which offers us two extra reasons for not introducing a low priced item under the business's brand 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 market is low particularly as the buyer has low knowledge about the item. While business like Kemp Foods Corp have managed to train distributors concerning adhesives, the last consumer depends on distributors. Approximately 72% of sales are made directly by manufacturers and distributors for immediate adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Given the truth that the adhesive market is controlled by three players, it could be stated that the supplier takes pleasure in a higher bargaining power compared to the buyer. Nevertheless, the reality remains that the provider does not have much impact over the purchaser at this moment particularly as the purchaser does disappoint brand name recognition or price sensitivity. When it comes to the adhesive market while the manufacturer and the purchaser do not have a significant control over the actual sales, this shows that the supplier 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 competitors in the instantaneous adhesive market indicates that the marketplace allows ease of entry. Nevertheless, if we look at Kemp Foods Corp in particular, the business has dual capabilities in regards to being a manufacturer of instant adhesives and adhesive dispensers. Potential threats in devices giving industry are low which shows the possibility of developing brand awareness in not just instantaneous adhesives but likewise in dispensing adhesives as none of the market gamers has handled to place itself in dual abilities.
Danger of Substitutes: The danger of alternatives in the immediate adhesive industry is low while the dispenser market in particular has alternatives like Glumetic tip applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The reality stays that if Kemp Foods Corp introduced Case Study Help, it would be enjoying sales cannibalization for its own items. (see appendix 1 for framework).
Despite the fact that our 3C analysis has given various reasons for not releasing Case Study Help under Kemp Foods Corp name, we have actually a suggested marketing mix for Case Study Help provided listed below if Kemp Foods Corp chooses to go ahead with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor car services' for a number of reasons. This market has an additional growth capacity of 10.1% which might be a good adequate specific niche market section for Case Study Help. Not only would a portable dispenser offer convenience to this particular market, the truth that the Diy market can likewise be targeted if a drinkable low priced adhesive is being offered for usage with SuperBonder.
Price: The suggested rate of Case Study Help has 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 pointer' or the 'glumetic pointer'. A rate listed below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle upkeep store needs to acquire the item on his own. This would increase the possibility of influencing mechanics to purchase the item for usage in their everyday maintenance tasks.
Kemp Foods Corp would only be getting $157 per unit as displayed in appendix 2 which gives a breakdown of gross success and net profitability for Kemp Foods Corp for introducing Case Study Help.
Place: A circulation model where Kemp Foods Corp straight sends the product to the regional supplier and keeps a 10% drop shipment allowance for the supplier would be utilized by Kemp Foods Corp. Considering that the sales group is currently participated in selling instantaneous adhesives and they do not have competence in selling dispensers, involving them in the selling process would be expensive particularly as each sales call expenses roughly $120. The distributors are already selling dispensers so selling Case Study Help through them would be a beneficial choice.
Promotion: Although a low promotional budget needs to have been designated to Case Study Help however the truth that the dispenser is an innovation and it requires to be marketed well in order to cover the capital expenses incurred for production, the recommended advertising strategy costing $51816 is suggested for initially presenting the item in the market. The prepared advertisements in publications would be targeted at mechanics in vehicle upkeep shops. (Suggested text for the ad is displayed in appendix 3 while the 4Ps are summed up in appendix 4).