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Penn West Petroleum Ltd Case Study Solution
Penn West Petroleum Ltd Case Study Help
Penn West Petroleum Ltd Case Study Analysis
The following section concentrates on the of marketing for Penn West Petroleum Ltd where the business's consumers, rivals and core competencies have actually examined in order to justify whether the choice to release Case Study Help under Penn West Petroleum Ltd brand name would be a practical choice or not. We have actually firstly taken a look at the type of consumers that Penn West Petroleum Ltd deals in while an assessment of the competitive environment and the business's weaknesses and strengths follows. Embedded in the 3C analysis is the validation for not launching Case Study Help under Penn West Petroleum Ltd name.
Penn West Petroleum Ltd customers can be segmented into 2 groups, final consumers and commercial consumers. Both the groups use Penn West Petroleum Ltd high performance adhesives while the company is not just involved in the production of these adhesives however likewise markets them to these consumer groups. There are 2 kinds of products that are being sold to these potential markets; anaerobic adhesives and instantaneous adhesives. We would be concentrating on the consumers of instantaneous adhesives for this analysis because the market for the latter has a lower capacity for Penn West Petroleum Ltd compared to that of instantaneous adhesives.
The overall market for instantaneous adhesives is around 890,000 in the United States in 1978 which covers both consumer groups which have actually been identified earlier.If we take a look at a breakdown of Penn West Petroleum Ltd potential market or client groups, we can see that the business sells to OEMs (Original Devices Manufacturers), Do-it-Yourself consumers, repair work and overhauling companies (MRO) and manufacturers handling items made from leather, plastic, wood and metal. This diversity in clients suggests that Penn West Petroleum Ltd can target has numerous options in terms of segmenting the market for its new product particularly as each of these groups would be needing the very same type of product with particular modifications in amount, packaging or demand. The client is not price sensitive or brand conscious so launching a low priced dispenser under Penn West Petroleum Ltd name is not a recommended choice.
Penn West Petroleum Ltd is not just a manufacturer of adhesives however takes pleasure in market management in the instant adhesive market. The business has its own experienced and competent sales force which adds worth to sales by training the company's network of 250 suppliers for helping with the sale of adhesives.
Core skills are not limited to adhesive production just as Penn West Petroleum Ltd also specializes in making adhesive dispensing devices to help with making use of its products. This double production strategy gives Penn West Petroleum Ltd an edge over competitors because none of the competitors of giving devices makes immediate adhesives. Furthermore, none of these competitors sells directly to the consumer either and uses suppliers for reaching out to clients. While we are looking at the strengths of Penn West Petroleum Ltd, it is crucial to highlight the company's weak points.
Although the business's sales staff is knowledgeable in training distributors, the truth remains that the sales team is not trained in offering equipment so there is a possibility of relying heavily on distributors when promoting adhesive devices. It ought to likewise be noted that the suppliers are revealing hesitation when it comes to selling equipment that needs servicing which increases the obstacles of selling devices under a specific brand name.
If we take a look at Penn West Petroleum Ltd line of product in adhesive devices particularly, the business has products aimed at the luxury of the marketplace. The possibility of sales cannibalization exists if Penn West Petroleum Ltd sells Case Study Help under the very same portfolio. Provided the fact that Case Study Help is priced lower than Penn West Petroleum Ltd high-end product line, sales cannibalization would definitely be affecting Penn West Petroleum Ltd sales income if the adhesive devices is sold under the company's brand.
We can see sales cannibalization affecting Penn West Petroleum Ltd 27A Pencil Applicator which is priced at $275. If Case Study Help is launched under the company's brand name, there is another possible threat which could reduce Penn West Petroleum Ltd profits. The reality that $175000 has been spent in promoting SuperBonder suggests that it is not a great time for launching a dispenser which can highlight the fact 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 market in general, the adhesives market does disappoint brand name orientation or rate awareness which provides us two additional factors for not releasing a low priced item under the business's brand.
The competitive environment of Penn West Petroleum Ltd would be studied via 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 specifically as the purchaser has low knowledge about the product. While companies like Penn West Petroleum Ltd have actually handled to train distributors relating to adhesives, the final customer is dependent on suppliers. Approximately 72% of sales are made straight by producers and distributors for instantaneous adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Provided the truth that the adhesive market is controlled by three gamers, it could be stated that the provider enjoys a higher bargaining power compared to the buyer. The truth stays that the provider does not have much impact over the purchaser at this point especially as the purchaser does not show brand name acknowledgment or rate sensitivity. This suggests that the supplier has the greater power when it comes to the adhesive market while the buyer and the maker 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 competitors in the immediate adhesive market indicates that the marketplace permits ease of entry. If we look at Penn West Petroleum Ltd in particular, the company has dual capabilities in terms of being a producer of adhesive dispensers and instantaneous adhesives. Possible hazards in devices giving industry are low which shows the possibility of creating brand name awareness in not just immediate adhesives however likewise in dispensing adhesives as none of the industry players has actually handled to place itself in double capabilities.
Danger of Substitutes: The risk of alternatives in the instantaneous adhesive market is low while the dispenser market in particular has alternatives like Glumetic idea applicators, built-in applicators, pencil applicators and advanced consoles. The reality stays that if Penn West Petroleum Ltd introduced Case Study Help, it would be delighting in sales cannibalization for its own products. (see appendix 1 for structure).
Despite the fact that our 3C analysis has actually given various factors for not introducing Case Study Help under Penn West Petroleum Ltd name, we have actually a recommended marketing mix for Case Study Help offered listed below if Penn West Petroleum Ltd chooses to go ahead with the launch.
Product & Target Market: The target market selected for Case Study Help is 'Motor lorry services' for a number of reasons. This market has an extra growth capacity of 10.1% which might be a good sufficient specific niche market segment for Case Study Help. Not just would a portable dispenser offer benefit to this particular market, the fact that the Diy market can likewise be targeted if a safe and clean low priced adhesive is being offered for use with SuperBonder.
Price: The recommended rate of Case Study Help has actually been kept at $175 to the end user whether it is sold through suppliers or through direct selling. This cost would not consist of the expense of the 'vari suggestion' or the 'glumetic pointer'. A price listed below $250 would not need approvals from the senior management in case a mechanic at an automobile upkeep shop requires to buy the product on his own. This would increase the possibility of affecting mechanics to purchase the item for use in their daily maintenance jobs.
Penn West Petroleum Ltd would just be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross success and net success for Penn West Petroleum Ltd for launching Case Study Help.
Place: A circulation design where Penn West Petroleum Ltd directly sends out the product to the regional supplier and keeps a 10% drop shipment allowance for the distributor would be utilized by Penn West Petroleum Ltd. Because the sales team is currently engaged in selling instant adhesives and they do not have competence in selling dispensers, including them in the selling process would be costly particularly as each sales call expenses roughly $120. The suppliers are already offering dispensers so offering Case Study Help through them would be a favorable choice.
Promotion: A low promotional budget ought to have been appointed to Case Study Help however the reality that the dispenser is an innovation and it requires to be marketed well in order to cover the capital costs incurred for production, the recommended marketing plan costing $51816 is recommended for at first introducing the item in the market. The prepared advertisements in publications would be targeted at mechanics in automobile maintenance stores. (Recommended text for the ad is shown in appendix 3 while the 4Ps are summed up in appendix 4).
