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Phon Tech Corporation Case Study Solution
Phon Tech Corporation Case Study Help
Phon Tech Corporation Case Study Analysis
The following area concentrates on the of marketing for Phon Tech Corporation where the business's clients, rivals and core proficiencies have evaluated in order to justify whether the decision to launch Case Study Help under Phon Tech Corporation trademark name would be a practical option or not. We have first of all looked at the type of consumers that Phon Tech Corporation deals in while an examination of the competitive environment and the business's weaknesses and strengths follows. Embedded in the 3C analysis is the reason for not introducing Case Study Help under Phon Tech Corporation name.
Both the groups use Phon Tech Corporation high performance adhesives while the company is not just involved in the production of these adhesives however also markets them to these customer groups. We would be focusing on the customers of immediate adhesives for this analysis because 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 been determined earlier.If we look at a breakdown of Phon Tech Corporation possible market or consumer groups, we can see that the business sells to OEMs (Original Devices Producers), Do-it-Yourself clients, repair and overhauling companies (MRO) and makers handling products made of leather, plastic, wood and metal. This variety in consumers suggests that Phon Tech Corporation can target has different alternatives in terms of segmenting the marketplace for its brand-new item particularly as each of these groups would be needing the same kind of item with particular modifications in demand, product packaging or quantity. The client is not rate delicate or brand name mindful so releasing a low priced dispenser under Phon Tech Corporation name is not an advised choice.
Phon Tech Corporation is not simply a manufacturer of adhesives but takes pleasure in market leadership in the instantaneous adhesive market. The company has its own skilled and qualified sales force which includes worth to sales by training the business's network of 250 distributors for assisting in the sale of adhesives.
Core competences are not restricted to adhesive production just as Phon Tech Corporation also focuses on making adhesive giving equipment to help with making use of its items. This double production technique offers Phon Tech Corporation an edge over rivals because none of the competitors of giving devices makes immediate adhesives. In addition, none of these competitors offers directly to the consumer either and uses distributors for reaching out to customers. While we are looking at the strengths of Phon Tech Corporation, it is very important to highlight the business's weak points too.
Although the business's sales staff is competent in training distributors, the fact remains that the sales group is not trained in offering equipment so there is a possibility of relying greatly on suppliers when promoting adhesive devices. Nevertheless, it ought to also be noted that the distributors are revealing unwillingness when it comes to offering equipment that requires servicing which increases the obstacles of selling devices under a particular brand name.
The company has products aimed at the high end of the market if we look at Phon Tech Corporation item line in adhesive devices particularly. The possibility of sales cannibalization exists if Phon Tech Corporation offers Case Study Help under the exact same portfolio. Offered the truth that Case Study Help is priced lower than Phon Tech Corporation high-end product line, sales cannibalization would absolutely be affecting Phon Tech Corporation sales earnings 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 company's brand name, there is another possible danger which could lower Phon Tech Corporation profits. The truth that $175000 has been spent in promoting SuperBonder suggests that it is not a good time for launching a dispenser which can highlight the reality that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instantaneous adhesive.
In addition, if we look at the market in general, the adhesives market does not show brand name orientation or price awareness which gives us 2 extra factors for not introducing a low priced product under the business's brand.
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 purchaser has low understanding about the product. While companies like Phon Tech Corporation have actually handled to train distributors relating to adhesives, the last customer depends on suppliers. Around 72% of sales are made straight by manufacturers and distributors for immediate adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Provided the truth that the adhesive market is controlled by 3 gamers, it could be stated that the supplier enjoys a greater bargaining power compared to the buyer. However, the fact remains that the supplier does not have much impact over the purchaser at this point especially as the buyer does disappoint brand acknowledgment or cost sensitivity. When it comes to the adhesive market while the buyer and the producer do not have a significant control over the actual sales, this suggests that the distributor has the greater power.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry revealed by foreign Japanese competitors in the instantaneous adhesive market indicates that the market allows ease of entry. If we look at Phon Tech Corporation in particular, the company has dual abilities in terms of being a producer of adhesive dispensers and immediate adhesives. Potential hazards in devices dispensing industry are low which reveals the possibility of producing brand awareness in not just instantaneous adhesives but likewise in dispensing adhesives as none of the industry gamers has handled to place itself in double abilities.
Danger of Substitutes: The danger of replacements in the immediate adhesive market is low while the dispenser market in particular has alternatives like Glumetic idea applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The fact stays that if Phon Tech Corporation introduced Case Study Help, it would be indulging in sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has actually given different reasons for not releasing Case Study Help under Phon Tech Corporation name, we have actually a suggested marketing mix for Case Study Help offered listed below if Phon Tech Corporation chooses to go on with the launch.
Product & Target Market: The target audience chosen for Case Study Help is 'Motor vehicle services' for a number of reasons. There are currently 89257 facilities in this segment and a high use of approximately 58900 pounds. is being used by 36.1 % of the market. This market has an extra development potential of 10.1% which may be a sufficient niche market sector for Case Study Help. Not only would a portable dispenser deal convenience to this particular market, the truth that the Diy market can likewise be targeted if a safe and clean low priced adhesive is being cost use with SuperBonder. The item would be sold without the 'glumetic suggestion' and 'vari-drop' so that the customer can choose whether he wants to choose either of the two accessories or not.
Price: The recommended cost of Case Study Help has actually been kept at $175 to the end user whether it is offered through distributors or by means of direct selling. This price would not include the cost of the 'vari idea' or the 'glumetic tip'. A price listed below $250 would not need approvals from the senior management in case a mechanic at an automobile upkeep store needs to purchase the product on his own. This would increase the possibility of affecting mechanics to buy the item for usage in their everyday maintenance jobs.
Phon Tech Corporation would only be getting $157 per unit as shown in appendix 2 which offers 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 straight sends the item to the regional distributor and keeps a 10% drop shipment allowance for the supplier would be used by Phon Tech Corporation. Because the sales team is currently taken part in offering instantaneous adhesives and they do not have competence in offering dispensers, involving them in the selling process would be expensive especially as each sales call expenses roughly $120. The suppliers are already offering dispensers so selling Case Study Help through them would be a favorable option.
Promotion: Although a low marketing budget needs to have been assigned 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 suggested advertising plan costing $51816 is suggested for at first introducing the item in the market. The prepared advertisements in publications 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).
