The following section focuses on the of marketing for Medco Energi Internasional where the company's consumers, competitors and core proficiencies have actually assessed in order to validate whether the choice to launch Case Study Help under Medco Energi Internasional brand would be a possible option or not. We have to start with looked at the kind of customers that Medco Energi Internasional handle while an examination of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the reason for not introducing Case Study Help under Medco Energi Internasional name.
Both the groups utilize Medco Energi Internasional high efficiency adhesives while the business is not just involved in the production of these adhesives but likewise markets them to these consumer groups. We would be focusing on the consumers of immediate adhesives for this analysis because the market for the latter has a lower potential for Medco Energi Internasional compared to that of instantaneous adhesives.
The overall market for instant adhesives is around 890,000 in the US in 1978 which covers both customer groups which have been identified earlier.If we look at a breakdown of Medco Energi Internasional potential market or client groups, we can see that the company sells to OEMs (Original Devices Producers), Do-it-Yourself clients, repair work and revamping companies (MRO) and manufacturers dealing in items made of leather, plastic, wood and metal. This diversity in clients suggests that Medco Energi Internasional can target has various alternatives in regards to segmenting the market for its brand-new item particularly as each of these groups would be needing the very same kind of item with particular modifications in product packaging, amount or need. Nevertheless, the consumer is not price sensitive or brand conscious so introducing a low priced dispenser under Medco Energi Internasional name is not a suggested alternative.
Medco Energi Internasional is not just a maker of adhesives but takes pleasure in market leadership in the immediate adhesive market. The business has its own proficient and competent sales force which adds worth to sales by training the business's network of 250 distributors for helping with the sale of adhesives. Medco Energi Internasional believes in exclusive circulation as shown by the fact that it has selected to offer through 250 distributors whereas there is t a network of 10000 distributors that can be checked out for expanding reach through distributors. The company's reach is not restricted to North America just as it also takes pleasure in worldwide sales. With 1400 outlets spread all across North America, Medco Energi Internasional has its internal production plants rather than using out-sourcing as the preferred strategy.
Core skills are not restricted to adhesive production just as Medco Energi Internasional likewise focuses on making adhesive giving equipment to assist in making use of its items. This double production strategy provides Medco Energi Internasional an edge over competitors given that none of the competitors of giving equipment makes instantaneous adhesives. Additionally, none of these rivals offers directly to the consumer either and uses distributors for connecting to consumers. While we are looking at the strengths of Medco Energi Internasional, it is very important to highlight the company's weak points also.
Although the business's sales personnel is proficient in training distributors, the reality stays that the sales team is not trained in selling devices so there is a possibility of relying heavily on suppliers when promoting adhesive equipment. It must likewise be noted that the suppliers are showing hesitation when it comes to offering equipment that needs maintenance which increases the challenges of offering equipment under a particular brand name.
If we look at Medco Energi Internasional line of product in adhesive devices particularly, the business has items targeted at the luxury of the market. If Medco Energi Internasional offers Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Offered the truth that Case Study Help is priced lower than Medco Energi Internasional high-end line of product, sales cannibalization would absolutely be impacting Medco Energi Internasional sales revenue if the adhesive equipment is sold under the company's trademark name.
We can see sales cannibalization impacting Medco Energi Internasional 27A Pencil Applicator which is priced at $275. There is another possible danger which could lower Medco Energi Internasional income if Case Study Help is launched under the company's trademark name. The fact that $175000 has been spent in promoting SuperBonder suggests that it is not a good 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.
Additionally, if we look at the marketplace in general, the adhesives market does not show brand orientation or cost consciousness which provides us two additional reasons for not introducing a low priced product under the company's trademark name.
The competitive environment of Medco Energi Internasional would be studied through 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 industry is low specifically as the purchaser has low knowledge about the product. While business like Medco Energi Internasional have handled to train suppliers concerning adhesives, the final customer is dependent on suppliers. Around 72% of sales are made directly by makers and distributors for instant adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Offered the truth that the adhesive market is controlled by 3 players, it could be said that the supplier delights in a higher bargaining power compared to the buyer. The fact remains that the supplier does not have much influence over the buyer at this point particularly as the purchaser does not show brand acknowledgment or price sensitivity. When it comes to the adhesive market while the buyer and the maker do not have a significant control over the real sales, this indicates that the supplier has the higher power.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry shown by foreign Japanese competitors in the instantaneous adhesive market shows that the marketplace allows ease of entry. However, if we take a look at Medco Energi Internasional in particular, the business has dual abilities in terms of being a maker of adhesive dispensers and instant adhesives. Prospective risks in equipment dispensing market are low which reveals the possibility of developing brand awareness in not only instantaneous adhesives but also in giving adhesives as none of the market gamers has actually managed to position itself in double capabilities.
Threat of Substitutes: The threat of replacements in the instantaneous adhesive industry is low while the dispenser market in particular has replacements like Glumetic suggestion applicators, in-built applicators, pencil applicators and advanced consoles. The fact remains that if Medco Energi Internasional presented Case Study Help, it would be indulging in sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has given various reasons for not releasing Case Study Help under Medco Energi Internasional name, we have actually a recommended marketing mix for Case Study Help given below if Medco Energi Internasional chooses to go on with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor automobile services' for a number of reasons. This market has an additional growth potential of 10.1% which may be a great adequate niche market segment for Case Study Help. Not just would a portable dispenser offer benefit to this particular market, the truth that the Do-it-Yourself market can likewise be targeted if a drinkable low priced adhesive is being offered for use with SuperBonder.
Price: The recommended cost of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or via direct selling. A price listed below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle upkeep shop requires to buy the product on his own.
Medco Energi Internasional would just be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross profitability and net success for Medco Energi Internasional for introducing Case Study Help.
Place: A distribution design where Medco Energi Internasional directly sends out the product to the local distributor and keeps a 10% drop delivery allowance for the supplier would be utilized by Medco Energi Internasional. Given that the sales group is currently engaged in selling instant adhesives and they do not have expertise in selling dispensers, involving them in the selling process would be costly specifically as each sales call costs roughly $120. The suppliers are currently selling dispensers so selling Case Study Help through them would be a favorable alternative.
Promotion: Although a low advertising spending plan should have been designated to Case Study Help however the reality that the dispenser is a development and it requires to be marketed well in order to cover the capital expenses incurred for production, the recommended marketing plan costing $51816 is suggested for at first presenting the product in the market. The planned ads in publications would be targeted at mechanics in vehicle upkeep stores. (Recommended text for the advertisement is shown in appendix 3 while the 4Ps are summarized in appendix 4).