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Lulucom Case Study Solution
Lulucom Case Study Help
Lulucom Case Study Analysis
The following area focuses on the of marketing for Lulucom where the business's consumers, competitors and core competencies have evaluated in order to justify whether the decision to release Case Study Help under Lulucom brand name would be a possible alternative or not. We have actually firstly taken a look at the type of clients that Lulucom handle while an assessment of the competitive environment and the business's weak points and strengths follows. Embedded in the 3C analysis is the validation for not releasing Case Study Help under Lulucom name.
Both the groups use Lulucom high efficiency adhesives while the company is not just included in the production of these adhesives however also markets them to these client groups. We would be focusing on the customers of instantaneous adhesives for this analysis since the market for the latter has a lower potential for Lulucom compared to that of instant adhesives.
The overall 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 look at a breakdown of Lulucom possible market or customer groups, we can see that the business offers to OEMs (Initial Devices Producers), Do-it-Yourself customers, repair work and upgrading companies (MRO) and makers handling products made from leather, wood, metal and plastic. This diversity in customers recommends that Lulucom can target has numerous choices in terms of segmenting the market for its new product especially as each of these groups would be needing the exact same kind of product with particular modifications in product packaging, quantity or need. However, the client is not price delicate or brand name conscious so introducing a low priced dispenser under Lulucom name is not a suggested choice.
Lulucom is not simply a maker of adhesives but takes pleasure in market management in the instant adhesive industry. The business has its own competent and qualified sales force which adds worth to sales by training the company's network of 250 suppliers for facilitating the sale of adhesives. Lulucom believes in exclusive distribution as indicated by the fact that it has picked to offer through 250 distributors whereas there is t a network of 10000 suppliers that can be checked out for broadening reach by means of distributors. The business's reach is not limited to North America only as it also takes pleasure in worldwide sales. With 1400 outlets spread all across North America, Lulucom has its in-house production plants rather than using out-sourcing as the preferred method.
Core competences are not limited to adhesive manufacturing just as Lulucom likewise focuses on making adhesive dispensing devices to facilitate making use of its items. This double production technique offers Lulucom an edge over competitors because none of the competitors of giving devices makes instantaneous adhesives. Furthermore, none of these competitors sells directly to the consumer either and uses distributors for connecting to clients. While we are looking at the strengths of Lulucom, it is crucial to highlight the company's weaknesses.
The company's sales staff is experienced in training distributors, the fact stays that the sales group is not trained in offering devices so there is a possibility of relying greatly on distributors when promoting adhesive devices. It needs to also be kept in mind that the suppliers are showing unwillingness when it comes to selling devices that needs servicing which increases the challenges of selling devices under a particular brand name.
The business has actually items aimed at the high end of the market if we look at Lulucom item line in adhesive devices especially. If Lulucom offers Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Offered the reality that Case Study Help is priced lower than Lulucom high-end product line, sales cannibalization would certainly be affecting Lulucom sales profits if the adhesive equipment is offered under the business's trademark name.
We can see sales cannibalization affecting Lulucom 27A Pencil Applicator which is priced at $275. There is another possible risk which could reduce Lulucom revenue if Case Study Help is introduced under the company's brand name. The fact 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 instant adhesive.
In addition, if we look at the marketplace in general, the adhesives market does not show brand orientation or rate awareness which provides us 2 additional reasons for not releasing a low priced item under the business's brand.
The competitive environment of Lulucom 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 buyer in this industry is low particularly as the purchaser has low understanding about the item. While companies like Lulucom have actually handled to train distributors regarding adhesives, the last customer is dependent on suppliers. Approximately 72% of sales are made directly by manufacturers and suppliers for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Given the truth that the adhesive market is dominated by three gamers, it could be stated that the provider enjoys a greater bargaining power compared to the buyer. However, the reality remains that the provider does not have much impact over the buyer at this point specifically as the purchaser does not show brand recognition or rate sensitivity. This shows that the supplier has the greater power when it pertains to the adhesive market while the manufacturer and the buyer do not have a major control over the actual sales.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry shown by foreign Japanese rivals in the instant adhesive market suggests that the market allows ease of entry. If we look at Lulucom in specific, the company has dual capabilities in terms of being a producer of immediate adhesives and adhesive dispensers. Potential threats in equipment dispensing industry are low which reveals the possibility of producing brand awareness in not just immediate adhesives but likewise in dispensing adhesives as none of the market players has managed to place itself in double abilities.
Threat of Substitutes: The danger of alternatives in the instantaneous adhesive market is low while the dispenser market in particular has substitutes like Glumetic pointer applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The fact stays that if Lulucom presented Case Study Help, it would be enjoying sales cannibalization for its own products. (see appendix 1 for structure).
Despite the fact that our 3C analysis has given numerous factors for not introducing Case Study Help under Lulucom name, we have actually a recommended marketing mix for Case Study Help provided below if Lulucom chooses to proceed with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor lorry services' for a number of factors. This market has an extra development capacity of 10.1% which may be an excellent adequate specific niche market segment for Case Study Help. Not only would a portable dispenser offer benefit to this specific market, the fact that the Do-it-Yourself market can likewise be targeted if a safe and clean low priced adhesive is being offered for use with SuperBonder.
Price: The suggested rate of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or through direct selling. This price would not include the cost of the 'vari pointer' or the 'glumetic pointer'. A cost below $250 would not need approvals from the senior management in case a mechanic at an automobile upkeep shop needs to buy the product on his own. This would increase the possibility of affecting mechanics to purchase the product for use in their daily upkeep jobs.
Lulucom would only be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross success and net success for Lulucom for launching Case Study Help.
Place: A circulation design where Lulucom straight sends the product to the regional distributor and keeps a 10% drop shipment allowance for the supplier would be utilized by Lulucom. Because the sales group is already taken part in selling immediate adhesives and they do not have know-how in selling dispensers, including them in the selling procedure would be costly specifically as each sales call expenses roughly $120. The suppliers are already selling dispensers so offering Case Study Help through them would be a favorable option.
Promotion: Although a low advertising budget must have been designated to Case Study Help but the reality that the dispenser is a development and it needs to be marketed well in order to cover the capital costs sustained for production, the suggested advertising strategy costing $51816 is suggested for initially presenting the product in the market. The planned advertisements in magazines would be targeted at mechanics in vehicle maintenance stores. (Suggested text for the advertisement is displayed in appendix 3 while the 4Ps are summarized in appendix 4).
