The following section focuses on the of marketing for Safecard Services Inc where the business's customers, rivals and core competencies have actually evaluated in order to validate whether the decision to launch Case Study Help under Safecard Services Inc brand would be a feasible alternative or not. We have actually to start with taken a look at the kind of consumers that Safecard Services Inc deals in while an examination of the competitive environment and the company's weak points and strengths follows. Embedded in the 3C analysis is the validation for not introducing Case Study Help under Safecard Services Inc name.
Both the groups utilize Safecard Services Inc high efficiency adhesives while the company is not just included in the production of these adhesives but also markets them to these customer groups. We would be focusing on the customers of instant adhesives for this analysis considering that the market for the latter has a lower potential for Safecard Services Inc compared to that of immediate adhesives.
The overall market for instant adhesives is roughly 890,000 in the United States in 1978 which covers both customer groups which have actually been recognized earlier.If we take a look at a breakdown of Safecard Services Inc potential market or customer groups, we can see that the company sells to OEMs (Initial Equipment Producers), Do-it-Yourself consumers, repair and revamping companies (MRO) and makers handling products made of leather, wood, metal and plastic. This variety in clients recommends that Safecard Services Inc can target has numerous alternatives in regards to segmenting the marketplace for its new item specifically as each of these groups would be requiring the same type of item with particular changes in demand, packaging or amount. Nevertheless, the consumer is not price sensitive or brand mindful so launching a low priced dispenser under Safecard Services Inc name is not a suggested choice.
Safecard Services Inc is not just a manufacturer of adhesives however takes pleasure in market management in the immediate adhesive market. The business has its own proficient and certified sales force which includes value to sales by training the business's network of 250 distributors for assisting in the sale of adhesives. Safecard Services Inc believes in exclusive circulation as suggested by the reality that it has picked to sell through 250 distributors whereas there is t a network of 10000 suppliers that can be checked out for expanding reach via suppliers. The business's reach is not limited to North America just as it likewise delights in international sales. With 1400 outlets spread all across The United States and Canada, Safecard Services Inc has its in-house production plants rather than using out-sourcing as the favored technique.
Core competences are not restricted to adhesive manufacturing only as Safecard Services Inc likewise focuses on making adhesive giving devices to help with making use of its products. This double production method gives Safecard Services Inc an edge over rivals since none of the rivals of dispensing equipment makes immediate adhesives. In addition, none of these rivals sells directly to the consumer either and utilizes distributors for connecting to customers. While we are looking at the strengths of Safecard Services Inc, it is essential to highlight the business's weak points.
The company's sales staff is experienced in training suppliers, the truth remains that the sales team is not trained in selling devices so there is a possibility of relying greatly on suppliers when promoting adhesive equipment. It must likewise be kept in mind that the suppliers are revealing unwillingness when it comes to selling devices that needs servicing which increases the challenges of selling equipment under a particular brand name.
If we look at Safecard Services Inc product line in adhesive equipment particularly, the business has actually products targeted at the high end of the market. The possibility of sales cannibalization exists if Safecard Services Inc sells Case Study Help under the same portfolio. Given the truth that Case Study Help is priced lower than Safecard Services Inc high-end product line, sales cannibalization would certainly be impacting Safecard Services Inc sales revenue if the adhesive devices is offered under the company's brand.
We can see sales cannibalization affecting Safecard Services Inc 27A Pencil Applicator which is priced at $275. If Case Study Help is launched under the business's brand name, there is another possible hazard which might reduce Safecard Services Inc earnings. The truth that $175000 has been spent in promoting SuperBonder recommends 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 look at the market in general, the adhesives market does disappoint brand orientation or cost consciousness which offers us two extra factors for not introducing a low priced product under the business's trademark name.
The competitive environment of Safecard Services Inc would be studied by means of Porter's five forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this industry is low specifically as the buyer has low understanding about the item. While companies like Safecard Services Inc have handled to train suppliers relating to adhesives, the last customer is dependent on distributors. Roughly 72% of sales are made straight 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 3 gamers, it could be stated that the provider takes pleasure in a greater bargaining power compared to the purchaser. The reality stays that the provider does not have much impact over the purchaser at this point especially as the buyer does not reveal brand name recognition or price level of sensitivity. This suggests that the distributor has the greater power when it concerns the adhesive market while the producer and the purchaser do not have a significant control over the real sales.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry shown by foreign Japanese competitors in the immediate adhesive market shows that the market permits ease of entry. If we look at Safecard Services Inc in specific, the business has dual capabilities in terms of being a manufacturer of adhesive dispensers and instant adhesives. Possible dangers in equipment giving industry are low which reveals the possibility of creating brand name awareness in not just instantaneous adhesives but also in giving adhesives as none of the industry players has handled to place itself in dual capabilities.
Threat of Substitutes: The hazard of replacements in the instant adhesive industry is low while the dispenser market in particular has substitutes like Glumetic suggestion applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The fact remains that if Safecard Services Inc presented Case Study Help, it would be enjoying sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has actually provided numerous factors for not launching Case Study Help under Safecard Services Inc name, we have a suggested marketing mix for Case Study Help given below if Safecard Services Inc chooses to go on with the launch.
Product & Target Market: The target market selected for Case Study Help is 'Motor lorry services' for a number of reasons. This market has an additional development potential of 10.1% which may be an excellent sufficient specific niche market sector for Case Study Help. Not just would a portable dispenser deal benefit to this particular market, the fact that the Do-it-Yourself market can also be targeted if a safe and clean low priced adhesive is being offered for usage with SuperBonder.
Price: The recommended rate of Case Study Help has been kept at $175 to the end user whether it is offered through suppliers or through direct selling. This price would not include the expense of the 'vari suggestion' or the 'glumetic pointer'. A price listed below $250 would not need approvals from the senior management in case a mechanic at an automobile maintenance shop needs to acquire the item on his own. This would increase the possibility of affecting mechanics to purchase the item for use in their daily maintenance tasks.
Safecard Services Inc would just be getting $157 per unit as shown in appendix 2 which offers a breakdown of gross profitability and net success for Safecard Services Inc for releasing Case Study Help.
Place: A circulation model where Safecard Services Inc directly sends the item to the local distributor and keeps a 10% drop delivery allowance for the distributor would be used by Safecard Services Inc. Given that the sales group is currently participated in selling immediate adhesives and they do not have know-how in selling dispensers, involving them in the selling procedure would be pricey especially as each sales call costs around $120. The suppliers are already selling dispensers so selling Case Study Help through them would be a beneficial alternative.
Promotion: A low marketing budget ought 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 expenses incurred for production, the recommended advertising strategy costing $51816 is suggested for at first introducing the item in the market. The prepared advertisements in magazines would be targeted at mechanics in car maintenance shops. (Recommended text for the advertisement is displayed in appendix 3 while the 4Ps are summed up in appendix 4).