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Nova Chemical Corp Case Study Solution
Nova Chemical Corp Case Study Help
Nova Chemical Corp Case Study Analysis
The following section concentrates on the of marketing for Nova Chemical Corp where the company's clients, competitors and core proficiencies have examined in order to validate whether the decision to introduce Case Study Help under Nova Chemical Corp brand name would be a practical choice or not. We have firstly taken a look at the type of consumers that Nova Chemical Corp deals in while an evaluation 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 Nova Chemical Corp name.
Nova Chemical Corp consumers can be segmented into two groups, industrial consumers and final customers. Both the groups utilize Nova Chemical Corp high performance adhesives while the company is not only involved in the production of these adhesives however likewise markets them to these customer groups. There are 2 types of items that are being offered to these possible markets; anaerobic adhesives and instant adhesives. We would be concentrating on the consumers of instant adhesives for this analysis because the market for the latter has a lower potential for Nova Chemical Corp compared to that of instant adhesives.
The overall market for instant adhesives is approximately 890,000 in the US in 1978 which covers both consumer groups which have been recognized earlier.If we take a look at a breakdown of Nova Chemical Corp possible market or client groups, we can see that the company offers to OEMs (Original Devices Producers), Do-it-Yourself consumers, repair and overhauling business (MRO) and makers dealing in items made from leather, wood, plastic and metal. This diversity in consumers suggests that Nova Chemical Corp can target has numerous choices in terms of segmenting the market for its brand-new product especially as each of these groups would be needing the very same type of product with particular changes in product packaging, amount or need. Nevertheless, the consumer is not price sensitive or brand mindful so launching a low priced dispenser under Nova Chemical Corp name is not a suggested alternative.
Nova Chemical Corp is not just a manufacturer of adhesives but takes pleasure in market management in the instant adhesive industry. The business has its own skilled and qualified sales force which adds worth to sales by training the company's network of 250 distributors for assisting in the sale of adhesives.
Core skills are not restricted to adhesive manufacturing just as Nova Chemical Corp also specializes in making adhesive giving devices to help with making use of its products. This double production strategy gives Nova Chemical Corp an edge over competitors since none of the rivals of dispensing devices makes instantaneous adhesives. Additionally, none of these competitors offers directly to the customer either and uses suppliers for connecting to customers. While we are looking at the strengths of Nova Chemical Corp, it is essential to highlight the company's weak points.
Although the company's sales staff is experienced in training distributors, the truth remains that the sales group is not trained in offering equipment so there is a possibility of relying greatly on distributors when promoting adhesive devices. It ought to likewise be kept in mind that the distributors are revealing unwillingness when it comes to selling equipment that requires servicing which increases the obstacles of selling devices under a particular brand name.
If we take a look at Nova Chemical Corp product line in adhesive equipment especially, the business has items focused on the high-end of the market. The possibility of sales cannibalization exists if Nova Chemical Corp offers Case Study Help under the same portfolio. Given the fact that Case Study Help is priced lower than Nova Chemical Corp high-end product line, sales cannibalization would certainly be impacting Nova Chemical Corp sales earnings if the adhesive equipment is sold under the business's brand name.
We can see sales cannibalization impacting Nova Chemical Corp 27A Pencil Applicator which is priced at $275. If Case Study Help is launched under the business's brand name, there is another possible danger which could decrease Nova Chemical Corp income. The fact that $175000 has actually been invested 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 market in general, the adhesives market does disappoint brand name orientation or cost consciousness which offers us two additional factors for not releasing a low priced product under the company's brand.
The competitive environment of Nova Chemical Corp would be studied via Porter's 5 forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this market is low particularly as the buyer has low knowledge about the item. While companies like Nova Chemical Corp have managed to train suppliers regarding adhesives, the last customer is dependent on distributors. Around 72% of sales are made straight by producers and distributors for instant adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Offered the reality that the adhesive market is controlled by three gamers, it could be stated that the provider takes pleasure in a greater bargaining power compared to the purchaser. The reality remains that the supplier does not have much influence over the purchaser at this point particularly as the purchaser does not reveal brand acknowledgment or cost sensitivity. This shows that the supplier has the higher power when it concerns the adhesive market while the maker and the purchaser 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 immediate adhesive market suggests that the market permits ease of entry. However, if we look at Nova Chemical Corp in particular, the company has double capabilities in regards to being a maker of instant adhesives and adhesive dispensers. Possible hazards in devices giving industry are low which reveals the possibility of developing brand name awareness in not only instantaneous adhesives but likewise in dispensing adhesives as none of the market players has actually managed to position itself in double abilities.
Risk of Substitutes: The risk of substitutes in the instant adhesive market is low while the dispenser market in particular has substitutes like Glumetic pointer applicators, inbuilt applicators, pencil applicators and advanced consoles. The reality stays that if Nova Chemical Corp presented Case Study Help, it would be delighting in sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has provided various reasons for not releasing Case Study Help under Nova Chemical Corp name, we have a suggested marketing mix for Case Study Help given below if Nova Chemical Corp decides to go on with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor vehicle services' for a number of reasons. This market has an additional development capacity of 10.1% which might be a good adequate niche market sector for Case Study Help. Not just would a portable dispenser offer benefit to this specific market, the reality that the Do-it-Yourself market can likewise be targeted if a potable low priced adhesive is being sold for usage with SuperBonder.
Price: The recommended cost of Case Study Help has actually 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 require approvals from the senior management in case a mechanic at a motor car upkeep store needs to acquire the item on his own.
Nova Chemical Corp would only be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross profitability and net profitability for Nova Chemical Corp for launching Case Study Help.
Place: A circulation design where Nova Chemical Corp straight sends the product to the regional supplier and keeps a 10% drop shipment allowance for the distributor would be used by Nova Chemical Corp. Considering that the sales team is currently taken part in selling instantaneous adhesives and they do not have knowledge in offering dispensers, including them in the selling process would be expensive especially as each sales call costs roughly $120. The suppliers are already offering dispensers so selling Case Study Help through them would be a favorable alternative.
Promotion: Although a low advertising spending plan ought to have been appointed to Case Study Help but the fact 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 initially presenting the item in the market. The prepared ads in publications would be targeted at mechanics in car upkeep shops. (Recommended text for the advertisement is shown in appendix 3 while the 4Ps are summed up in appendix 4).
