The following section concentrates on the of marketing for Red Hen Baking Company where the business's clients, rivals and core proficiencies have assessed in order to validate whether the choice to launch Case Study Help under Red Hen Baking Company brand name would be a feasible choice or not. We have to start with taken a look at the type of customers that Red Hen Baking Company handle while an evaluation of the competitive environment and the company's weak points and strengths follows. Embedded in the 3C analysis is the reason for not launching Case Study Help under Red Hen Baking Company name.
Both the groups utilize Red Hen Baking Company high efficiency adhesives while the business is not just included in the production of these adhesives however also markets them to these consumer groups. We would be focusing on the consumers of instantaneous adhesives for this analysis since the market for the latter has a lower potential for Red Hen Baking Company compared to that of immediate adhesives.
The total market for instant adhesives is approximately 890,000 in the United States in 1978 which covers both client groups which have been recognized earlier.If we look at a breakdown of Red Hen Baking Company prospective market or consumer groups, we can see that the company offers to OEMs (Original Devices Makers), Do-it-Yourself consumers, repair work and upgrading companies (MRO) and makers handling items made of leather, metal, plastic and wood. This diversity in clients recommends that Red Hen Baking Company can target has different options in regards to segmenting the market for its new item particularly as each of these groups would be needing the very same type of product with particular modifications in product packaging, demand or amount. The client is not price sensitive or brand name mindful so releasing a low priced dispenser under Red Hen Baking Company name is not a recommended alternative.
Red Hen Baking Company is not simply a maker of adhesives however delights in market management in the instant adhesive industry. The company has its own competent and certified sales force which includes value to sales by training the business's network of 250 distributors for facilitating the sale of adhesives.
Core competences are not restricted to adhesive manufacturing just as Red Hen Baking Company likewise focuses on making adhesive giving devices to facilitate using its products. This double production technique provides Red Hen Baking Company an edge over rivals since none of the competitors of dispensing equipment makes instantaneous adhesives. Furthermore, none of these competitors offers straight to the consumer either and uses suppliers for connecting to clients. While we are looking at the strengths of Red Hen Baking Company, it is crucial to highlight the company's weak points.
Although the company's sales staff is proficient in training distributors, the truth remains that the sales team is not trained in offering devices so there is a possibility of relying greatly on distributors when promoting adhesive equipment. However, it should also be kept in mind that the distributors are revealing unwillingness when it concerns offering equipment that requires maintenance which increases the challenges of selling devices under a particular trademark name.
The company has products intended at the high end of the market if we look at Red Hen Baking Company product line in adhesive equipment particularly. If Red Hen Baking Company sells Case Study Help under the very same portfolio, the possibility of sales cannibalization exists. Given the fact that Case Study Help is priced lower than Red Hen Baking Company high-end line of product, sales cannibalization would definitely be affecting Red Hen Baking Company sales revenue if the adhesive devices is offered under the business's trademark name.
We can see sales cannibalization impacting Red Hen Baking Company 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 Red Hen Baking Company profits. The fact that $175000 has actually been invested in promoting SuperBonder suggests that it is not a good time for releasing a dispenser which can highlight the fact that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the immediate adhesive.
Furthermore, if we take a look at the marketplace in general, the adhesives market does not show brand name orientation or cost awareness which offers us 2 additional reasons for not releasing a low priced product under the business's brand name.
The competitive environment of Red Hen Baking Company would be studied through Porter's 5 forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the purchaser in this market is low specifically as the purchaser has low knowledge about the product. While companies like Red Hen Baking Company have actually handled to train suppliers concerning adhesives, the last customer depends on distributors. Approximately 72% of sales are made straight by manufacturers and suppliers for instant adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the reality that the adhesive market is controlled by 3 players, it could be said that the supplier enjoys a higher bargaining power compared to the purchaser. However, the fact remains that the supplier does not have much influence over the buyer at this moment specifically as the purchaser does disappoint brand recognition or rate level of sensitivity. When it comes to the adhesive market while the buyer and the maker do not have a significant control over the real sales, this shows that the supplier has the higher power.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry shown by foreign Japanese competitors in the instantaneous adhesive market suggests that the market enables ease of entry. If we look at Red Hen Baking Company in particular, the business has dual capabilities in terms of being a producer of adhesive dispensers and instant adhesives. Prospective threats in devices giving industry are low which reveals the possibility of producing brand name awareness in not just instant adhesives but also in dispensing adhesives as none of the market players has actually managed to place itself in dual abilities.
Risk of Substitutes: The risk of substitutes in the immediate adhesive market is low while the dispenser market in particular has substitutes like Glumetic idea applicators, built-in applicators, pencil applicators and advanced consoles. The fact remains that if Red Hen Baking Company presented Case Study Help, it would be delighting in sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has offered various factors for not releasing Case Study Help under Red Hen Baking Company name, we have actually a suggested marketing mix for Case Study Help offered listed below if Red Hen Baking Company decides to go ahead with the launch.
Product & Target Market: The target market selected for Case Study Help is 'Motor automobile services' for a number of reasons. This market has an extra development capacity of 10.1% which might be a good enough niche market sector for Case Study Help. Not only would a portable dispenser offer convenience to this particular market, the reality that the Do-it-Yourself market can also be targeted if a drinkable low priced adhesive is being offered for usage with SuperBonder.
Price: The recommended price of Case Study Help has actually been kept at $175 to the end user whether it is sold through suppliers or via direct selling. This price would not include the expense of the 'vari pointer' or the 'glumetic suggestion'. A price below $250 would not need approvals from the senior management in case a mechanic at an automobile upkeep store requires to acquire the item on his own. This would increase the possibility of influencing mechanics to buy the item for usage in their day-to-day maintenance jobs.
Red Hen Baking Company would only be getting $157 per unit as shown in appendix 2 which provides a breakdown of gross profitability and net profitability for Red Hen Baking Company for launching Case Study Help.
Place: A distribution design where Red Hen Baking Company directly sends out the product to the regional supplier and keeps a 10% drop delivery allowance for the distributor would be used by Red Hen Baking Company. Since the sales group is already participated in offering instantaneous adhesives and they do not have competence in offering dispensers, including them in the selling process would be costly specifically as each sales call costs approximately $120. The suppliers are already selling dispensers so offering Case Study Help through them would be a favorable alternative.
Promotion: A low marketing budget plan should have been appointed to Case Study Help however the truth that the dispenser is a development and it requires to be marketed well in order to cover the capital costs incurred for production, the suggested marketing strategy costing $51816 is suggested for initially presenting the product in the market. The prepared ads in magazines would be targeted at mechanics in automobile maintenance stores. (Suggested text for the ad is displayed in appendix 3 while the 4Ps are summed up in appendix 4).