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Koffman Corporation Case Study Solution
Koffman Corporation Case Study Help
Koffman Corporation Case Study Analysis
The following area focuses on the of marketing for Koffman Corporation where the company's clients, rivals and core competencies have actually evaluated in order to justify whether the choice to release Case Study Help under Koffman Corporation brand name would be a possible choice or not. We have actually firstly taken a look at the kind of consumers that Koffman Corporation deals in 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 releasing Case Study Help under Koffman Corporation name.
Koffman Corporation consumers can be segmented into two groups, industrial customers and final consumers. Both the groups use Koffman Corporation high performance adhesives while the company is not just involved in the production of these adhesives however also markets them to these customer groups. There are 2 kinds of products that are being sold to these potential markets; immediate adhesives and anaerobic adhesives. We would be concentrating on the customers of instant adhesives for this analysis because the marketplace for the latter has a lower capacity for Koffman Corporation compared to that of immediate adhesives.
The total market for instantaneous adhesives is approximately 890,000 in the US in 1978 which covers both customer groups which have been identified earlier.If we look at a breakdown of Koffman Corporation potential market or customer groups, we can see that the business offers to OEMs (Original Equipment Producers), Do-it-Yourself customers, repair work and upgrading companies (MRO) and makers handling products made of leather, plastic, metal and wood. This variety in consumers suggests that Koffman Corporation can target has various options in terms of segmenting the marketplace for its new product particularly as each of these groups would be requiring the same type of product with respective modifications in demand, product packaging or quantity. The client is not rate delicate or brand conscious so introducing a low priced dispenser under Koffman Corporation name is not a suggested choice.
Koffman Corporation is not just a maker of adhesives but enjoys market leadership in the immediate adhesive industry. The business has its own knowledgeable and qualified sales force which includes worth to sales by training the company's network of 250 suppliers for helping with the sale of adhesives. Koffman Corporation believes in exclusive distribution as indicated by the fact that it has chosen to sell through 250 suppliers whereas there is t a network of 10000 suppliers that can be checked out for broadening reach by means of distributors. The company's reach is not limited to North America only as it likewise delights in international sales. With 1400 outlets spread out all throughout The United States and Canada, Koffman Corporation has its in-house production plants instead of using out-sourcing as the preferred technique.
Core skills are not limited to adhesive manufacturing only as Koffman Corporation likewise focuses on making adhesive dispensing devices to assist in using its items. This double production method offers Koffman Corporation an edge over rivals because none of the competitors of dispensing devices makes immediate adhesives. Additionally, none of these competitors sells directly to the consumer either and uses distributors for connecting to clients. While we are taking a look at the strengths of Koffman Corporation, it is very important to highlight the business's weaknesses also.
The business's sales staff is competent 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 devices. Nevertheless, it should likewise be kept in mind that the suppliers are showing unwillingness when it concerns selling devices that needs servicing which increases the obstacles of selling equipment under a particular brand.
If we look at Koffman Corporation product line in adhesive equipment especially, the company has products targeted at the luxury of the market. The possibility of sales cannibalization exists if Koffman Corporation sells Case Study Help under the very same portfolio. Offered the fact that Case Study Help is priced lower than Koffman Corporation high-end product line, sales cannibalization would definitely be impacting Koffman Corporation sales income if the adhesive devices is sold under the business's brand name.
We can see sales cannibalization impacting Koffman Corporation 27A Pencil Applicator which is priced at $275. If Case Study Help is launched under the company's brand name, there is another possible threat which could decrease Koffman Corporation profits. The truth that $175000 has actually been invested in promoting SuperBonder suggests 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 immediate adhesive.
Furthermore, if we take a look at the marketplace in general, the adhesives market does not show brand name orientation or cost consciousness which offers us two extra factors for not releasing a low priced item under the company's brand.
The competitive environment of Koffman Corporation would be studied via Porter's 5 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 specifically as the buyer has low knowledge about the item. While companies like Koffman Corporation have actually handled to train suppliers concerning adhesives, the final customer is dependent on distributors. Around 72% of sales are made directly by manufacturers and suppliers for instant adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the truth that the adhesive market is dominated by 3 players, it could be stated that the provider delights in a higher bargaining power compared to the buyer. The reality stays that the provider does not have much impact over the purchaser at this point especially as the buyer does not show brand acknowledgment or rate sensitivity. This indicates that the supplier has the higher power when it pertains to the adhesive market while the purchaser and the maker do not have a significant control over the actual sales.
Threat of new entrants: The competitive environment with its low brand commitment and the ease of entry shown by foreign Japanese competitors in the immediate adhesive market shows that the marketplace enables ease of entry. However, if we take a look at Koffman Corporation in particular, the business has double abilities in regards to being a producer of instantaneous adhesives and adhesive dispensers. Prospective dangers in devices giving market are low which shows the possibility of creating brand awareness in not just instantaneous adhesives but likewise in giving adhesives as none of the market gamers has actually managed to position itself in dual abilities.
Danger of Substitutes: The threat of alternatives in the instant adhesive market is low while the dispenser market in particular has substitutes like Glumetic idea applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The truth stays that if Koffman Corporation introduced Case Study Help, it would be indulging in sales cannibalization for its own items. (see appendix 1 for framework).
Despite the fact that our 3C analysis has actually provided numerous factors for not launching Case Study Help under Koffman Corporation name, we have actually a recommended marketing mix for Case Study Help offered listed below if Koffman Corporation chooses to proceed with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor vehicle services' for a variety of factors. There are presently 89257 establishments in this section and a high usage of around 58900 pounds. is being utilized by 36.1 % of the marketplace. This market has an additional growth potential of 10.1% which might be a good enough niche market segment for Case Study Help. Not only would a portable dispenser deal convenience to this specific market, the reality that the Diy market can also be targeted if a potable low priced adhesive is being cost use with SuperBonder. The product would be sold without the 'glumetic tip' and 'vari-drop' so that the consumer can decide whether he wishes to choose either of the two accessories or not.
Price: The recommended rate of Case Study Help has actually been kept at $175 to the end user whether it is sold through suppliers or through direct selling. A rate below $250 would not need approvals from the senior management in case a mechanic at a motor lorry upkeep store requires to purchase the product on his own.
Koffman Corporation would just be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross success and net success for Koffman Corporation for launching Case Study Help.
Place: A distribution model where Koffman Corporation straight sends the item to the regional distributor and keeps a 10% drop shipment allowance for the distributor would be used by Koffman Corporation. Considering that the sales group is currently taken part in offering instantaneous adhesives and they do not have proficiency in selling dispensers, including them in the selling process would be costly particularly as each sales call expenses roughly $120. The distributors are already selling dispensers so offering Case Study Help through them would be a favorable choice.
Promotion: Although a low advertising budget needs to have been assigned to Case Study Help but 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 suggested marketing strategy costing $51816 is advised for at first presenting the product in the market. The planned advertisements in publications 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).
