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Salem Telephone Co Case Study Solution
Salem Telephone Co Case Study Help
Salem Telephone Co Case Study Analysis
The following area concentrates on the of marketing for Salem Telephone Co where the company's customers, competitors and core competencies have assessed in order to validate whether the decision to introduce Case Study Help under Salem Telephone Co brand would be a possible alternative or not. We have firstly taken a look at the kind of clients that Salem Telephone Co deals in while an evaluation of the competitive environment and the business's weak points and strengths follows. Embedded in the 3C analysis is the validation for not introducing Case Study Help under Salem Telephone Co name.
Both the groups utilize Salem Telephone Co high efficiency adhesives while the company is not only included in the production of these adhesives however likewise markets them to these consumer groups. We would be focusing on the customers of instantaneous adhesives for this analysis given that the market for the latter has a lower potential for Salem Telephone Co compared to that of instantaneous adhesives.
The overall market for instant adhesives is around 890,000 in the US in 1978 which covers both client groups which have been determined earlier.If we take a look at a breakdown of Salem Telephone Co potential market or customer groups, we can see that the business offers to OEMs (Original Devices Producers), Do-it-Yourself consumers, repair work and revamping companies (MRO) and makers dealing in products made of leather, plastic, wood and metal. This diversity in consumers recommends that Salem Telephone Co can target has different options in terms of segmenting the marketplace for its new item particularly as each of these groups would be requiring the very same type of product with respective modifications in packaging, demand or quantity. However, the consumer is not price sensitive or brand name mindful so launching a low priced dispenser under Salem Telephone Co name is not a recommended option.
Salem Telephone Co is not simply a producer of adhesives however enjoys market management in the instant adhesive industry. The business has its own knowledgeable and qualified sales force which adds value to sales by training the company's network of 250 distributors for facilitating the sale of adhesives.
Core proficiencies are not restricted to adhesive production just as Salem Telephone Co also concentrates on making adhesive giving equipment to facilitate using its products. This double production method gives Salem Telephone Co an edge over rivals given that none of the competitors of giving equipment makes instantaneous adhesives. Additionally, none of these rivals offers directly to the customer either and uses suppliers for connecting to clients. While we are looking at the strengths of Salem Telephone Co, it is very important to highlight the company's weaknesses also.
Although the company's sales personnel is experienced in training suppliers, the fact stays that the sales team is not trained in selling devices so there is a possibility of relying greatly on distributors when promoting adhesive equipment. It must also be noted that the distributors are showing hesitation when it comes to offering equipment that requires maintenance which increases the challenges of selling devices under a particular brand name.
The company has actually products intended at the high end of the market if we look at Salem Telephone Co item line in adhesive devices particularly. The possibility of sales cannibalization exists if Salem Telephone Co offers Case Study Help under the same portfolio. Offered the fact that Case Study Help is priced lower than Salem Telephone Co high-end line of product, sales cannibalization would definitely be affecting Salem Telephone Co sales revenue if the adhesive devices is offered under the business's brand name.
We can see sales cannibalization affecting Salem Telephone Co 27A Pencil Applicator which is priced at $275. There is another possible risk which might decrease Salem Telephone Co earnings if Case Study Help is introduced under the company's trademark name. The fact that $175000 has been invested in promoting SuperBonder recommends that it is not a great time for launching a dispenser which can highlight the truth 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 market in general, the adhesives market does disappoint brand orientation or cost consciousness which offers us two additional reasons for not releasing a low priced product under the company's trademark name.
The competitive environment of Salem Telephone Co would be studied via Porter's 5 forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this market is low especially as the purchaser has low understanding about the item. While business like Salem Telephone Co have managed to train suppliers relating to adhesives, the last customer is dependent on suppliers. Approximately 72% of sales are made directly by manufacturers and distributors for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Given the reality that the adhesive market is controlled by three players, it could be stated that the provider enjoys a greater bargaining power compared to the purchaser. However, the fact stays that the provider does not have much impact over the purchaser at this point particularly as the purchaser does not show brand name acknowledgment or cost level of sensitivity. When it comes to the adhesive market while the producer and the purchaser do not have a significant control over the real sales, this suggests that the supplier has the greater power.
Threat of new entrants: The competitive environment with its low brand name loyalty and the ease of entry revealed by foreign Japanese rivals in the instantaneous adhesive market indicates that the marketplace permits ease of entry. If we look at Salem Telephone Co in specific, the business has dual abilities in terms of being a manufacturer of adhesive dispensers and instantaneous adhesives. Potential dangers in equipment dispensing industry are low which shows the possibility of producing brand name awareness in not just immediate adhesives but likewise in dispensing adhesives as none of the market players has handled to position itself in double abilities.
Risk of Substitutes: The danger of substitutes in the instantaneous adhesive industry is low while the dispenser market in particular has replacements like Glumetic suggestion applicators, built-in applicators, pencil applicators and sophisticated consoles. The fact stays that if Salem Telephone Co presented Case Study Help, it would be delighting in sales cannibalization for its own products. (see appendix 1 for framework).
Despite the fact that our 3C analysis has actually given various reasons for not releasing Case Study Help under Salem Telephone Co name, we have actually a recommended marketing mix for Case Study Help offered below if Salem Telephone Co decides to proceed with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor lorry services' for a number of factors. This market has an extra development capacity of 10.1% which may be a good enough specific niche market sector for Case Study Help. Not only would a portable dispenser deal benefit to this specific market, the truth that the Do-it-Yourself market can also be targeted if a drinkable low priced adhesive is being offered for use with SuperBonder.
Price: The recommended cost of Case Study Help has actually 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 tip' or the 'glumetic idea'. A cost below $250 would not need approvals from the senior management in case a mechanic at a motor vehicle upkeep shop needs to purchase the product on his own. This would increase the possibility of influencing mechanics to purchase the item for use in their day-to-day upkeep tasks.
Salem Telephone Co would just be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross success and net success for Salem Telephone Co for launching Case Study Help.
Place: A distribution model where Salem Telephone Co directly sends out the product to the local supplier and keeps a 10% drop delivery allowance for the distributor would be utilized by Salem Telephone Co. Considering that the sales team is already engaged in offering immediate adhesives and they do not have competence in offering dispensers, involving them in the selling procedure would be expensive particularly as each sales call costs around $120. The distributors are currently selling dispensers so offering Case Study Help through them would be a beneficial option.
Promotion: A low marketing spending plan must have been designated 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 sustained for production, the suggested marketing strategy costing $51816 is advised for initially introducing the product in the market. The planned advertisements in magazines would be targeted at mechanics in vehicle maintenance shops. (Suggested text for the advertisement is displayed in appendix 3 while the 4Ps are summarized in appendix 4).
