The following section focuses on the of marketing for Lehigh Steel where the business's clients, competitors and core competencies have actually examined in order to justify whether the decision to launch Case Study Help under Lehigh Steel trademark name would be a possible choice or not. We have actually to start with looked at the kind of customers that Lehigh Steel deals in while an assessment of the competitive environment and the business's weak points and strengths follows. Embedded in the 3C analysis is the justification for not introducing Case Study Help under Lehigh Steel name.
Lehigh Steel consumers can be segmented into 2 groups, commercial clients and last consumers. Both the groups utilize Lehigh Steel high performance adhesives while the business is not just involved in the production of these adhesives but also markets them to these customer groups. There are two kinds of items that are being offered to these possible markets; instantaneous adhesives and anaerobic adhesives. We would be focusing on the customers of instant adhesives for this analysis since the market for the latter has a lower capacity for Lehigh Steel compared to that of instant adhesives.
The overall market for instantaneous adhesives is approximately 890,000 in the United States in 1978 which covers both client groups which have actually been recognized earlier.If we look at a breakdown of Lehigh Steel prospective market or customer groups, we can see that the company offers to OEMs (Original Equipment Makers), Do-it-Yourself clients, repair and overhauling companies (MRO) and makers handling items made from leather, plastic, metal and wood. This variety in clients recommends that Lehigh Steel can target has numerous options in terms of segmenting the market for its new product particularly as each of these groups would be requiring the exact same type of product with respective changes in demand, amount or product packaging. Nevertheless, the consumer is not price sensitive or brand mindful so releasing a low priced dispenser under Lehigh Steel name is not an advised option.
Lehigh Steel is not just a maker of adhesives however takes pleasure in market leadership in the instantaneous adhesive market. The company has its own skilled and competent sales force which adds worth to sales by training the company's network of 250 distributors for helping with the sale of adhesives.
Core proficiencies are not limited to adhesive manufacturing only as Lehigh Steel also specializes in making adhesive giving equipment to help with the use of its products. This double production method gives Lehigh Steel an edge over rivals considering that none of the rivals of giving equipment makes instantaneous adhesives. Additionally, none of these rivals offers directly to the consumer either and utilizes distributors for reaching out to customers. While we are looking at the strengths of Lehigh Steel, it is important to highlight the business's weak points.
The business's sales staff is competent in training suppliers, the fact remains that the sales group is not trained in offering equipment so there is a possibility of relying heavily on distributors when promoting adhesive equipment. Nevertheless, it needs to likewise be kept in mind that the distributors are showing hesitation when it comes to offering devices that needs servicing which increases the difficulties of selling devices under a particular brand.
The business has actually products intended at the high end of the market if we look at Lehigh Steel product line in adhesive devices particularly. The possibility of sales cannibalization exists if Lehigh Steel sells Case Study Help under the same portfolio. Provided the fact that Case Study Help is priced lower than Lehigh Steel high-end product line, sales cannibalization would certainly be affecting Lehigh Steel sales profits if the adhesive devices is sold under the business's brand.
We can see sales cannibalization affecting Lehigh Steel 27A Pencil Applicator which is priced at $275. If Case Study Help is released under the company's brand name, there is another possible risk which might lower Lehigh Steel earnings. The reality that $175000 has been invested in promoting SuperBonder recommends that it is not a good time for introducing a dispenser which can highlight the reality that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instant adhesive.
Additionally, if we take a look at the marketplace in general, the adhesives market does not show brand orientation or price consciousness which offers us two additional reasons for not introducing a low priced item under the business's brand name.
The competitive environment of Lehigh Steel 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 specifically as the purchaser has low understanding about the product. While companies like Lehigh Steel have actually managed to train suppliers concerning adhesives, the final consumer is dependent on distributors. Around 72% of sales are made straight by producers and distributors for immediate adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Offered the truth that the adhesive market is controlled by three players, it could be stated that the provider delights in a greater bargaining power compared to the purchaser. The truth stays that the provider does not have much impact over the purchaser at this point specifically as the purchaser does not show brand name acknowledgment or cost sensitivity. This suggests that the supplier has the greater power when it concerns the adhesive market while the manufacturer and the buyer do not have a significant control over the actual sales.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry shown by foreign Japanese rivals in the instantaneous adhesive market suggests that the marketplace enables ease of entry. If we look at Lehigh Steel in particular, the business has double abilities in terms of being a producer of adhesive dispensers and instantaneous adhesives. Prospective dangers in equipment 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 industry gamers has managed to position itself in double capabilities.
Hazard of Substitutes: The hazard of replacements in the immediate adhesive industry is low while the dispenser market in particular has alternatives like Glumetic pointer applicators, in-built applicators, pencil applicators and advanced consoles. The fact remains that if Lehigh Steel introduced Case Study Help, it would be indulging in sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has offered various factors for not launching Case Study Help under Lehigh Steel name, we have actually a suggested marketing mix for Case Study Help offered below if Lehigh Steel decides to go ahead with the launch.
Product & Target Market: The target audience chosen for Case Study Help is 'Motor vehicle services' for a variety of factors. There are currently 89257 facilities in this section and a high usage of roughly 58900 pounds. is being utilized by 36.1 % of the marketplace. This market has an additional development potential of 10.1% which might be a sufficient niche market section for Case Study Help. Not just would a portable dispenser offer convenience to this specific market, the reality that the Do-it-Yourself market can also be targeted if a drinkable low priced adhesive is being cost use with SuperBonder. The item would be offered without the 'glumetic idea' and 'vari-drop' so that the customer can decide whether he wants to select either of the two accessories or not.
Price: The suggested cost of Case Study Help has actually been kept at $175 to the end user whether it is sold through suppliers or by means of direct selling. A rate below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle upkeep store needs to purchase the item on his own.
Lehigh Steel would only be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross profitability and net profitability for Lehigh Steel for releasing Case Study Help.
Place: A distribution design where Lehigh Steel straight sends the item to the regional supplier and keeps a 10% drop delivery allowance for the supplier would be used by Lehigh Steel. Since the sales team is already taken part in selling instantaneous adhesives and they do not have expertise in selling dispensers, involving them in the selling procedure would be pricey specifically as each sales call costs roughly $120. The suppliers are already offering dispensers so offering Case Study Help through them would be a beneficial choice.
Promotion: Although a low advertising spending plan ought to have been designated to Case Study Help however the truth that the dispenser is a development and it requires to be marketed well in order to cover the capital expenses sustained for production, the recommended advertising strategy costing $51816 is advised for initially introducing the product in the market. The planned advertisements in publications would be targeted at mechanics in lorry upkeep shops. (Recommended text for the ad is displayed in appendix 3 while the 4Ps are summarized in appendix 4).