The following section focuses on the of marketing for Phon Tech Corporation where the company's clients, rivals and core competencies have actually assessed in order to justify whether the choice to launch Case Study Help under Phon Tech Corporation brand would be a practical choice or not. We have firstly looked at the kind of consumers that Phon Tech Corporation handle while an evaluation of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the validation for not releasing Case Study Help under Phon Tech Corporation name.
Both the groups use Phon Tech Corporation high performance adhesives while the business is not only involved in the production of these adhesives but also markets them to these consumer groups. We would be focusing on the consumers of instantaneous adhesives for this analysis considering that the market for the latter has a lower capacity for Phon Tech Corporation compared to that of immediate adhesives.
The overall market for instant adhesives is roughly 890,000 in the US in 1978 which covers both customer groups which have actually been recognized earlier.If we take a look at a breakdown of Phon Tech Corporation possible market or client groups, we can see that the company sells to OEMs (Original Equipment Manufacturers), Do-it-Yourself clients, repair work and revamping companies (MRO) and producers handling items made from leather, plastic, metal and wood. This variety in consumers suggests that Phon Tech Corporation can target has numerous alternatives in regards to segmenting the market for its new product specifically as each of these groups would be requiring the exact same kind of item with particular modifications in packaging, quantity or need. The client is not price delicate or brand conscious so releasing a low priced dispenser under Phon Tech Corporation name is not an advised option.
Phon Tech Corporation is not just a producer of adhesives however takes pleasure in market management in the instantaneous adhesive industry. The company has its own proficient and competent sales force which adds worth to sales by training the business's network of 250 suppliers for assisting in the sale of adhesives.
Core competences are not restricted to adhesive manufacturing only as Phon Tech Corporation also concentrates on making adhesive giving equipment to facilitate making use of its products. This double production technique offers Phon Tech Corporation an edge over competitors because 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 connecting to customers. While we are looking at the strengths of Phon Tech Corporation, it is essential to highlight the business's weak points.
Although the company's sales staff is knowledgeable in training suppliers, the truth stays that the sales team is not trained in selling equipment so there is a possibility of relying greatly on suppliers when promoting adhesive equipment. However, it should also be noted that the suppliers are revealing unwillingness when it concerns offering devices that needs maintenance which increases the challenges of offering devices under a particular brand name.
If we take a look at Phon Tech Corporation product line in adhesive devices especially, the business has actually products targeted at the high-end of the marketplace. The possibility of sales cannibalization exists if Phon Tech Corporation offers Case Study Help under the very same portfolio. Given the truth that Case Study Help is priced lower than Phon Tech Corporation high-end product line, sales cannibalization would absolutely be impacting Phon Tech Corporation sales revenue if the adhesive devices is offered under the company's trademark name.
We can see sales cannibalization impacting Phon Tech Corporation 27A Pencil Applicator which is priced at $275. If Case Study Help is introduced under the business's brand name, there is another possible threat which could reduce Phon Tech Corporation revenue. The fact that $175000 has been invested 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 instantaneous adhesive.
In addition, if we take a look at the marketplace in general, the adhesives market does not show brand name orientation or rate consciousness which gives us two extra factors for not launching a low priced item under the business's trademark name.
The competitive environment of Phon Tech Corporation would be studied by means of Porter's 5 forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this market is low specifically as the buyer has low knowledge about the product. While companies like Phon Tech Corporation have managed to train distributors concerning adhesives, the final customer is dependent on distributors. Roughly 72% of sales are made directly by producers and suppliers for instantaneous adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Given the fact that the adhesive market is controlled by 3 players, it could be stated that the provider takes pleasure in a higher bargaining power compared to the purchaser. However, the reality stays that the provider does not have much impact over the buyer at this point especially as the buyer does disappoint brand recognition or cost level of sensitivity. When it comes to the adhesive market while the buyer and the maker do not have a major control over the real sales, this suggests 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 instant adhesive market shows that the market enables ease of entry. However, if we look at Phon Tech Corporation in particular, the company has dual capabilities in regards to being a producer of instant adhesives and adhesive dispensers. Potential risks in equipment giving industry are low which reveals the possibility of producing brand name awareness in not only instant adhesives but likewise in giving adhesives as none of the industry gamers has managed 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 replacements like Glumetic suggestion applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The fact stays that if Phon Tech Corporation 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 reasons for not launching Case Study Help under Phon Tech Corporation name, we have a suggested marketing mix for Case Study Help given below if Phon Tech Corporation chooses to go ahead with the launch.
Product & Target Market: The target market selected for Case Study Help is 'Motor vehicle services' for a number of reasons. There are presently 89257 facilities in this segment and a high use of around 58900 pounds. is being used by 36.1 % of the market. This market has an additional development potential of 10.1% which might be a sufficient specific niche market segment for Case Study Help. Not just would a portable dispenser offer convenience to this specific market, the truth that the Diy market can likewise be targeted if a drinkable low priced adhesive is being cost use with SuperBonder. The product would be sold without the 'glumetic pointer' and 'vari-drop' so that the consumer can decide whether he wants to go with either of the two devices or not.
Price: The recommended rate of Case Study Help has been kept at $175 to the end user whether it is sold through distributors or via direct selling. A price below $250 would not need approvals from the senior management in case a mechanic at a motor car upkeep store needs to acquire the item on his own.
Phon Tech Corporation would only be getting $157 per unit as displayed in appendix 2 which provides a breakdown of gross success and net profitability for Phon Tech Corporation for introducing Case Study Help.
Place: A circulation model where Phon Tech Corporation directly sends the item to the regional supplier and keeps a 10% drop shipment allowance for the distributor would be used by Phon Tech Corporation. Because the sales team is already taken part in selling instant adhesives and they do not have competence in offering dispensers, involving them in the selling process would be costly particularly as each sales call costs roughly $120. The distributors are already selling dispensers so selling Case Study Help through them would be a beneficial alternative.
Promotion: A low marketing budget plan must have been assigned to Case Study Help however the fact that the dispenser is a development and it requires to be marketed well in order to cover the capital costs sustained for production, the recommended marketing plan costing $51816 is suggested for initially introducing the item in the market. The prepared advertisements in magazines would be targeted at mechanics in car upkeep shops. (Recommended text for the ad is shown in appendix 3 while the 4Ps are summed up in appendix 4).