The following area concentrates on the of marketing for Penn West Petroleum Ltd where the company's customers, competitors and core competencies have examined in order to validate whether the decision to launch Case Study Help under Penn West Petroleum Ltd brand name would be a practical option or not. We have actually first of all taken a look at the type of clients that Penn West Petroleum Ltd handle while an evaluation of the competitive environment and the business's weaknesses and strengths follows. Embedded in the 3C analysis is the justification for not introducing Case Study Help under Penn West Petroleum Ltd name.
Penn West Petroleum Ltd customers can be segmented into 2 groups, commercial customers and last customers. Both the groups use Penn West Petroleum Ltd high performance adhesives while the business is not only associated with the production of these adhesives but likewise markets them to these consumer groups. There are two types of items that are being offered to these possible markets; instant adhesives and anaerobic adhesives. We would be focusing on the consumers of immediate adhesives for this analysis because the marketplace for the latter has a lower capacity for Penn West Petroleum Ltd compared to that of immediate adhesives.
The total market for immediate adhesives is roughly 890,000 in the US in 1978 which covers both client groups which have been recognized earlier.If we look at a breakdown of Penn West Petroleum Ltd prospective market or client groups, we can see that the business offers to OEMs (Initial Devices Manufacturers), Do-it-Yourself customers, repair and upgrading business (MRO) and makers handling products made from leather, metal, plastic and wood. This variety in customers suggests that Penn West Petroleum Ltd can target has different choices in terms of segmenting the market for its brand-new item particularly as each of these groups would be requiring the same type of item with particular changes in need, amount or packaging. However, the consumer is not rate sensitive or brand name mindful so launching a low priced dispenser under Penn West Petroleum Ltd name is not an advised option.
Penn West Petroleum Ltd is not just a producer of adhesives but enjoys market management in the instant adhesive market. The business has its own competent and qualified sales force which adds value to sales by training the business's network of 250 suppliers for facilitating the sale of adhesives. Penn West Petroleum Ltd believes in exclusive circulation as indicated by the truth that it has actually chosen to sell through 250 suppliers whereas there is t a network of 10000 suppliers that can be explored for broadening reach via distributors. The company's reach is not restricted to The United States and Canada only as it also takes pleasure in worldwide sales. With 1400 outlets spread all across The United States and Canada, Penn West Petroleum Ltd has its internal production plants instead of using out-sourcing as the favored strategy.
Core competences are not limited to adhesive manufacturing only as Penn West Petroleum Ltd likewise focuses on making adhesive dispensing equipment to assist in using its items. This dual production strategy gives Penn West Petroleum Ltd an edge over competitors because none of the competitors of dispensing equipment makes instantaneous adhesives. In addition, none of these competitors offers directly to the consumer either and makes use of distributors for reaching out to customers. While we are looking at the strengths of Penn West Petroleum Ltd, it is essential to highlight the business's weaknesses.
Although the company's sales staff is experienced in training suppliers, the fact remains that the sales group is not trained in offering equipment so there is a possibility of relying heavily on distributors when promoting adhesive equipment. Nevertheless, it should also be kept in mind that the suppliers are showing reluctance when it comes to offering equipment that requires servicing which increases the challenges of selling equipment under a specific brand name.
The company has products aimed at the high end of the market if we look at Penn West Petroleum Ltd product line in adhesive devices particularly. The possibility of sales cannibalization exists if Penn West Petroleum Ltd sells Case Study Help under the same portfolio. Given the truth that Case Study Help is priced lower than Penn West Petroleum Ltd high-end line of product, sales cannibalization would absolutely be affecting Penn West Petroleum Ltd sales earnings if the adhesive devices is sold under the company's brand name.
We can see sales cannibalization affecting Penn West Petroleum Ltd 27A Pencil Applicator which is priced at $275. There is another possible danger which might decrease Penn West Petroleum Ltd profits if Case Study Help is released under the company's brand name. 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 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 market in general, the adhesives market does disappoint brand name orientation or price awareness which gives us two extra factors for not introducing a low priced item under the business's brand name.
The competitive environment of Penn West Petroleum Ltd would be studied through Porter's five forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the purchaser in this industry is low particularly as the purchaser has low knowledge about the product. While companies like Penn West Petroleum Ltd have actually managed to train distributors relating to adhesives, the last customer depends on suppliers. Approximately 72% of sales are made directly by manufacturers and suppliers for instantaneous adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Offered the truth that the adhesive market is controlled by three players, it could be said that the supplier enjoys a greater bargaining power compared to the buyer. The fact stays that the supplier does not have much impact over the purchaser at this point especially as the purchaser does not reveal brand name acknowledgment or rate level of sensitivity. This shows that the distributor has the higher power when it concerns the adhesive market while the producer and the purchaser do not have a significant control over the actual sales.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry revealed by foreign Japanese competitors in the immediate adhesive market indicates that the market permits ease of entry. If we look at Penn West Petroleum Ltd in specific, the business has double abilities in terms of being a producer of immediate adhesives and adhesive dispensers. Prospective risks in equipment dispensing industry are low which shows the possibility of creating brand name awareness in not just immediate adhesives but likewise in giving adhesives as none of the market gamers has handled to position itself in double capabilities.
Danger of Substitutes: The risk of alternatives in the instant adhesive industry is low while the dispenser market in particular has substitutes 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 items. (see appendix 1 for framework).
Despite the fact that our 3C analysis has actually offered numerous reasons for not releasing Case Study Help under Penn West Petroleum Ltd name, we have a suggested marketing mix for Case Study Help offered listed below if Penn West Petroleum Ltd chooses to proceed with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Automobile services' for a number of factors. There are currently 89257 establishments in this section and a high usage of around 58900 lbs. is being utilized by 36.1 % of the market. This market has an extra growth potential of 10.1% which may be a sufficient specific niche market section for Case Study Help. Not only would a portable dispenser deal convenience to this particular market, the fact that the Diy market can also be targeted if a potable low priced adhesive is being cost use with SuperBonder. The product would be offered without the 'glumetic idea' and 'vari-drop' so that the customer can choose whether he wants to select either of the two accessories or not.
Price: The suggested rate of Case Study Help has been kept at $175 to the end user whether it is offered through suppliers or by means of direct selling. A rate below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle maintenance shop needs to acquire the item on his own.
Penn West Petroleum Ltd would only be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross profitability and net success for Penn West Petroleum Ltd for releasing Case Study Help.
Place: A circulation model where Penn West Petroleum Ltd directly sends the product to the local supplier and keeps a 10% drop shipment allowance for the distributor would be utilized by Penn West Petroleum Ltd. Considering that the sales group is already taken part in selling immediate adhesives and they do not have expertise in offering dispensers, including them in the selling procedure would be pricey specifically as each sales call costs approximately $120. The suppliers are currently selling dispensers so offering Case Study Help through them would be a beneficial alternative.
Promotion: A low advertising budget plan must have been designated to Case Study Help but the fact 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 advertising plan costing $51816 is recommended for initially introducing the item in the market. The prepared ads in publications would be targeted at mechanics in car upkeep stores. (Recommended text for the ad is displayed in appendix 3 while the 4Ps are summarized in appendix 4).