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Providian Financial Corporation Case Study Solution
Providian Financial Corporation Case Study Help
Providian Financial Corporation Case Study Analysis
The following section concentrates on the of marketing for Providian Financial Corporation where the business's clients, rivals and core competencies have evaluated in order to justify whether the choice to launch Case Study Help under Providian Financial Corporation brand would be a practical alternative or not. We have actually to start with looked at the kind of clients that Providian Financial Corporation handle while an examination of the competitive environment and the company's strengths and weak points follows. Embedded in the 3C analysis is the justification for not launching Case Study Help under Providian Financial Corporation name.
Providian Financial Corporation customers can be segmented into 2 groups, final consumers and industrial consumers. Both the groups use Providian Financial Corporation high performance adhesives while the business is not just involved in the production of these adhesives however likewise markets them to these consumer groups. There are two kinds of items that are being sold to these potential markets; anaerobic adhesives and instantaneous adhesives. We would be concentrating on the consumers of instant adhesives for this analysis considering that the market for the latter has a lower capacity for Providian Financial Corporation compared to that of instant adhesives.
The overall market for instant adhesives is roughly 890,000 in the US in 1978 which covers both client groups which have been identified earlier.If we take a look at a breakdown of Providian Financial Corporation potential market or customer groups, we can see that the business offers to OEMs (Initial Equipment Manufacturers), Do-it-Yourself clients, repair and revamping business (MRO) and producers handling products made from leather, metal, wood and plastic. This diversity in consumers recommends that Providian Financial Corporation can target has different options in regards to segmenting the market for its brand-new item particularly as each of these groups would be needing the very same type of product with respective changes in demand, amount or packaging. The client is not rate delicate or brand mindful so introducing a low priced dispenser under Providian Financial Corporation name is not a suggested alternative.
Providian Financial Corporation is not just a manufacturer of adhesives but delights in market leadership in the immediate adhesive industry. The company has its own knowledgeable and qualified sales force which adds value to sales by training the company's network of 250 suppliers for assisting in the sale of adhesives.
Core skills are not restricted to adhesive production just as Providian Financial Corporation likewise specializes in making adhesive dispensing devices to facilitate using its items. This dual production technique offers Providian Financial Corporation an edge over competitors considering that none of the rivals of giving devices makes immediate adhesives. In addition, none of these rivals sells straight to the customer either and utilizes distributors for connecting to customers. While we are looking at the strengths of Providian Financial Corporation, it is crucial to highlight the company's weak points.
Although the business's sales staff is skilled in training suppliers, the fact remains that the sales group is not trained in offering devices so there is a possibility of relying heavily on distributors when promoting adhesive equipment. However, it ought to also be noted that the distributors are showing unwillingness when it comes to offering equipment that needs maintenance which increases the challenges of selling equipment under a specific trademark name.
The company has products intended at the high end of the market if we look at Providian Financial Corporation item line in adhesive equipment particularly. The possibility of sales cannibalization exists if Providian Financial Corporation offers Case Study Help under the same portfolio. Provided the fact that Case Study Help is priced lower than Providian Financial Corporation high-end product line, sales cannibalization would definitely be affecting Providian Financial Corporation sales revenue if the adhesive devices is sold under the business's trademark name.
We can see sales cannibalization affecting Providian Financial Corporation 27A Pencil Applicator which is priced at $275. If Case Study Help is released under the business's brand name, there is another possible hazard which could reduce Providian Financial Corporation profits. The fact that $175000 has been spent in promoting SuperBonder suggests that it is not a great time for releasing a dispenser which can highlight the reality 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 marketplace in general, the adhesives market does disappoint brand name orientation or rate awareness which offers us 2 extra reasons for not introducing a low priced item under the business's brand name.
The competitive environment of Providian Financial Corporation 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 market is low especially as the purchaser has low understanding about the item. While companies like Providian Financial Corporation have managed to train distributors regarding adhesives, the final consumer depends on suppliers. Approximately 72% of sales are made directly by producers and distributors for instantaneous adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Provided the fact that the adhesive market is controlled by three players, it could be said that the supplier takes pleasure in a greater bargaining power compared to the purchaser. However, the reality stays that the provider does not have much influence over the buyer at this moment specifically as the buyer does not show brand recognition or cost level of sensitivity. When it comes to the adhesive market while the buyer and the producer do not have a major control over the real sales, this indicates that the supplier 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 rivals in the instant adhesive market suggests that the market allows ease of entry. However, if we look at Providian Financial Corporation in particular, the company has double abilities in terms of being a manufacturer of adhesive dispensers and immediate adhesives. Potential dangers in devices dispensing industry are low which shows the possibility of developing brand name awareness in not just instantaneous adhesives but likewise in dispensing adhesives as none of the industry gamers has handled to place itself in double capabilities.
Danger of Substitutes: The threat of alternatives in the immediate adhesive industry is low while the dispenser market in particular has substitutes like Glumetic suggestion applicators, in-built applicators, pencil applicators and advanced consoles. The reality remains that if Providian Financial Corporation presented 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 provided numerous reasons for not launching Case Study Help under Providian Financial Corporation name, we have actually a suggested marketing mix for Case Study Help offered listed below if Providian Financial Corporation chooses to go ahead with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor lorry services' for a number of factors. This market has an additional development potential of 10.1% which may be an excellent sufficient niche market sector for Case Study Help. Not just would a portable dispenser deal benefit to this particular market, the truth that the Do-it-Yourself market can also be targeted if a potable 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 offered through suppliers or through direct selling. A cost listed below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle upkeep store needs to purchase the product on his own.
Providian Financial Corporation would just be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross success and net success for Providian Financial Corporation for introducing Case Study Help.
Place: A distribution design where Providian Financial Corporation directly sends out the item to the regional supplier and keeps a 10% drop shipment allowance for the distributor would be utilized by Providian Financial Corporation. Since the sales team is currently engaged in offering instant adhesives and they do not have competence in selling dispensers, involving them in the selling procedure would be costly specifically as each sales call expenses approximately $120. The suppliers are already selling dispensers so offering Case Study Help through them would be a beneficial alternative.
Promotion: Although a low marketing spending plan needs to have been appointed to Case Study Help however the reality that the dispenser is a development and it requires to be marketed well in order to cover the capital costs incurred for production, the recommended advertising plan costing $51816 is advised for at first introducing the item in the market. The planned ads in publications would be targeted at mechanics in automobile upkeep stores. (Recommended text for the advertisement is shown in appendix 3 while the 4Ps are summed up in appendix 4).
