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Phelps Dodge Corp Case Study Solution
Phelps Dodge Corp Case Study Help
Phelps Dodge Corp Case Study Analysis
The following section focuses on the of marketing for Phelps Dodge Corp where the business's clients, competitors and core competencies have actually assessed in order to validate whether the decision to introduce Case Study Help under Phelps Dodge Corp trademark name would be a possible alternative or not. We have first of all looked at the type of consumers that Phelps Dodge Corp deals in while an assessment 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 Phelps Dodge Corp name.
Both the groups use Phelps Dodge Corp high performance adhesives while the business is not only included in the production of these adhesives however likewise markets them to these client groups. We would be focusing on the customers of instantaneous adhesives for this analysis given that the market for the latter has a lower capacity for Phelps Dodge Corp compared to that of immediate adhesives.
The total market for instant adhesives is approximately 890,000 in the US in 1978 which covers both consumer groups which have actually been recognized earlier.If we look at a breakdown of Phelps Dodge Corp possible market or customer groups, we can see that the company offers to OEMs (Original Equipment Makers), Do-it-Yourself clients, repair work and overhauling business (MRO) and manufacturers handling items made from leather, plastic, wood and metal. This diversity in consumers recommends that Phelps Dodge Corp can target has various choices in regards to segmenting the marketplace for its brand-new item especially as each of these groups would be needing the exact same kind of item with respective modifications in quantity, need or packaging. Nevertheless, the customer is not cost delicate or brand name conscious so introducing a low priced dispenser under Phelps Dodge Corp name is not an advised choice.
Phelps Dodge Corp is not just a manufacturer of adhesives but enjoys market management in the immediate adhesive market. The company has its own competent and competent sales force which includes worth to sales by training the company's network of 250 suppliers for facilitating the sale of adhesives.
Core competences are not restricted to adhesive manufacturing only as Phelps Dodge Corp also specializes in making adhesive giving devices to assist in the use of its products. This double production strategy gives Phelps Dodge Corp an edge over competitors considering that none of the rivals of dispensing equipment makes immediate adhesives. In addition, none of these rivals sells straight to the customer either and uses suppliers for connecting to customers. While we are looking at the strengths of Phelps Dodge Corp, it is very important to highlight the company's weaknesses too.
Although the company's sales personnel is experienced in training distributors, the truth stays that the sales group is not trained in selling devices so there is a possibility of relying greatly on suppliers when promoting adhesive equipment. It needs to also be kept in mind that the suppliers are showing reluctance when it comes to offering equipment that needs servicing which increases the challenges of offering devices under a specific brand name.
The company has items intended at the high end of the market if we look at Phelps Dodge Corp item line in adhesive equipment especially. If Phelps Dodge Corp sells Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Given the reality that Case Study Help is priced lower than Phelps Dodge Corp high-end product line, sales cannibalization would absolutely be affecting Phelps Dodge Corp sales profits if the adhesive equipment is sold under the company's brand name.
We can see sales cannibalization impacting Phelps Dodge Corp 27A Pencil Applicator which is priced at $275. If Case Study Help is released under the business's brand name, there is another possible danger which might lower Phelps Dodge Corp revenue. The truth that $175000 has actually been spent in promoting SuperBonder suggests that it is not a good time for introducing 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 take a look at the market in general, the adhesives market does disappoint brand orientation or price awareness which provides us 2 extra factors for not releasing a low priced item under the company's brand.
The competitive environment of Phelps Dodge Corp 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 specifically as the purchaser has low knowledge about the product. While business like Phelps Dodge Corp have managed to train suppliers relating to adhesives, the final consumer depends on distributors. Approximately 72% of sales are made directly by manufacturers and distributors for instant adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Given the reality that the adhesive market is controlled by three players, it could be said that the supplier enjoys a higher bargaining power compared to the buyer. However, the reality remains that the provider does not have much impact over the buyer at this point specifically as the buyer does not show brand name acknowledgment or rate level of sensitivity. When it comes to the adhesive market while the manufacturer and the buyer do not have a major control over the actual sales, this indicates that the supplier has the higher power.
Threat of new entrants: The competitive environment with its low brand name commitment and the ease of entry revealed by foreign Japanese rivals in the instantaneous adhesive market indicates that the marketplace allows ease of entry. If we look at Phelps Dodge Corp in specific, the business has double abilities in terms of being a manufacturer of immediate adhesives and adhesive dispensers. Potential risks in devices giving industry are low which reveals the possibility of producing brand awareness in not only immediate adhesives but also in dispensing adhesives as none of the industry players has actually managed 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 replacements like Glumetic tip applicators, in-built applicators, pencil applicators and advanced consoles. The fact stays that if Phelps Dodge Corp introduced Case Study Help, it would be enjoying sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has provided numerous reasons for not releasing Case Study Help under Phelps Dodge Corp name, we have a recommended marketing mix for Case Study Help offered below if Phelps Dodge Corp decides to go on with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor lorry services' for a number of factors. This market has an extra development potential of 10.1% which may be a good adequate specific niche market sector for Case Study Help. Not just would a portable dispenser offer convenience to this specific market, the fact that the Diy market can also be targeted if a safe and clean low priced adhesive is being sold for usage with SuperBonder.
Price: The suggested cost 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 price 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.
Phelps Dodge Corp would only be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross success and net success for Phelps Dodge Corp for releasing Case Study Help.
Place: A distribution model where Phelps Dodge Corp straight sends the product to the local distributor and keeps a 10% drop delivery allowance for the supplier would be used by Phelps Dodge Corp. Given that the sales team is currently participated in offering instant adhesives and they do not have expertise in selling dispensers, involving them in the selling procedure would be costly especially as each sales call expenses roughly $120. The suppliers are currently offering dispensers so offering Case Study Help through them would be a favorable option.
Promotion: Although a low marketing budget plan needs to have been appointed to Case Study Help however the reality that the dispenser is a development and it needs to be marketed well in order to cover the capital expenses incurred for production, the recommended advertising plan costing $51816 is suggested for at first introducing the item in the market. The prepared ads in publications would be targeted at mechanics in vehicle upkeep shops. (Suggested text for the advertisement is shown in appendix 3 while the 4Ps are summed up in appendix 4).
