The following section focuses on the of marketing for Olympus B where the company's consumers, rivals and core proficiencies have evaluated in order to justify whether the choice to launch Case Study Help under Olympus B brand name would be a possible alternative or not. We have actually first of all taken a look at the type of consumers that Olympus B handle while an examination of the competitive environment and the company's weaknesses and strengths follows. Embedded in the 3C analysis is the reason for not launching Case Study Help under Olympus B name.
Both the groups use Olympus B high efficiency adhesives while the company is not only 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 because the market for the latter has a lower capacity for Olympus B compared to that of immediate adhesives.
The total market for immediate adhesives is approximately 890,000 in the US in 1978 which covers both consumer groups which have actually been identified earlier.If we take a look at a breakdown of Olympus B potential market or client groups, we can see that the business sells to OEMs (Initial Equipment Makers), Do-it-Yourself consumers, repair and upgrading business (MRO) and manufacturers handling items made of leather, wood, plastic and metal. This diversity in consumers suggests that Olympus B can target has various alternatives in regards to segmenting the market for its new item especially as each of these groups would be needing the exact same kind of product with particular changes in need, amount or product packaging. Nevertheless, the client is not cost delicate or brand mindful so releasing a low priced dispenser under Olympus B name is not a recommended option.
Olympus B is not simply a producer of adhesives but delights in market leadership in the immediate adhesive industry. The business has its own skilled and qualified sales force which includes value to sales by training the business's network of 250 suppliers for facilitating the sale of adhesives.
Core competences are not restricted to adhesive production just as Olympus B also concentrates on making adhesive giving devices to help with the use of its products. This dual production strategy offers Olympus B an edge over competitors considering that none of the rivals of dispensing devices makes immediate adhesives. Furthermore, none of these rivals sells directly to the customer either and makes use of suppliers for reaching out to customers. While we are looking at the strengths of Olympus B, it is important to highlight the company's weaknesses.
Although the company's sales staff is competent in training distributors, the reality remains that the sales team is not trained in selling devices so there is a possibility of relying heavily on distributors when promoting adhesive equipment. It needs to also be noted that the distributors are revealing unwillingness when it comes to selling equipment that needs maintenance which increases the difficulties of offering devices under a specific brand name.
The business has actually products aimed at the high end of the market if we look at Olympus B product line in adhesive devices especially. If Olympus B sells Case Study Help under the exact same portfolio, the possibility of sales cannibalization exists. Offered the fact that Case Study Help is priced lower than Olympus B high-end product line, sales cannibalization would certainly be affecting Olympus B sales revenue if the adhesive devices is sold under the company's trademark name.
We can see sales cannibalization affecting Olympus B 27A Pencil Applicator which is priced at $275. If Case Study Help is introduced under the company's brand name, there is another possible threat which could lower Olympus B profits. The reality that $175000 has been invested in promoting SuperBonder suggests that it is not a great 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.
Furthermore, if we look at the marketplace in general, the adhesives market does not show brand name orientation or cost consciousness which provides us 2 extra reasons for not launching a low priced item under the business's brand.
The competitive environment of Olympus B would be studied via Porter's five 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 product. While companies like Olympus B have actually handled to train distributors relating to adhesives, the final customer is dependent on suppliers. Approximately 72% of sales are made directly by manufacturers and distributors for immediate adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Provided the fact that the adhesive market is controlled by 3 players, it could be said that the provider takes pleasure in a higher bargaining power compared to the buyer. The truth stays that the supplier does not have much influence over the purchaser at this point specifically as the purchaser does not reveal brand name recognition or rate level of sensitivity. This suggests that the supplier has the greater power when it pertains to the adhesive market while the purchaser and the manufacturer 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 revealed by foreign Japanese competitors in the instant adhesive market shows that the market enables ease of entry. If we look at Olympus B in specific, the company has double capabilities in terms of being a maker of instantaneous adhesives and adhesive dispensers. Potential hazards in devices dispensing industry are low which reveals the possibility of creating brand name awareness in not just immediate adhesives but likewise in giving adhesives as none of the industry gamers has actually managed to position itself in dual abilities.
Risk of Substitutes: The danger of substitutes in the instantaneous adhesive industry is low while the dispenser market in particular has replacements like Glumetic idea applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The reality remains that if Olympus B presented Case Study Help, it would be enjoying sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has provided numerous reasons for not launching Case Study Help under Olympus B name, we have actually a suggested marketing mix for Case Study Help provided below if Olympus B decides to go ahead with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor lorry services' for a number of reasons. This market has an additional development capacity of 10.1% which may be a great sufficient specific niche market section for Case Study Help. Not only would a portable dispenser offer convenience to this particular market, the fact that the Do-it-Yourself market can likewise be targeted if a safe and clean low priced adhesive is being sold 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 suppliers or via direct selling. This cost would not consist of the expense of the 'vari pointer' or the 'glumetic suggestion'. A cost below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle upkeep store needs to acquire the item on his own. This would increase the possibility of influencing mechanics to purchase the item for use in their everyday maintenance jobs.
Olympus B would just be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross success and net success for Olympus B for introducing Case Study Help.
Place: A circulation model where Olympus B straight sends the product to the regional distributor and keeps a 10% drop delivery allowance for the distributor would be used by Olympus B. Given that the sales team is currently participated in offering instant adhesives and they do not have knowledge in selling dispensers, including them in the selling process would be expensive specifically as each sales call costs around $120. The suppliers are already selling dispensers so selling Case Study Help through them would be a beneficial option.
Promotion: Although a low marketing spending plan should have been designated to Case Study Help but the truth that the dispenser is a development and it needs to be marketed well in order to cover the capital expenses sustained for production, the recommended advertising plan costing $51816 is recommended for initially introducing the item in the market. The planned advertisements in publications would be targeted at mechanics in lorry upkeep stores. (Recommended text for the advertisement is displayed in appendix 3 while the 4Ps are summarized in appendix 4).