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Sarnia Corp Case Study Solution
Sarnia Corp Case Study Help
Sarnia Corp Case Study Analysis
The following section concentrates on the of marketing for Sarnia Corp where the company's consumers, rivals and core proficiencies have assessed in order to validate whether the choice to launch Case Study Help under Sarnia Corp trademark name would be a practical choice or not. We have actually first of all looked at the type of clients that Sarnia Corp deals in while an examination of the competitive environment and the business's strengths and weaknesses follows. Embedded in the 3C analysis is the reason for not launching Case Study Help under Sarnia Corp name.
Both the groups use Sarnia Corp high efficiency adhesives while the business is not just included in the production of these adhesives but likewise markets them to these customer groups. We would be focusing on the consumers of immediate adhesives for this analysis since the market for the latter has a lower potential for Sarnia Corp compared to that of instantaneous adhesives.
The overall market for immediate adhesives is around 890,000 in the United States in 1978 which covers both consumer groups which have actually been determined earlier.If we look at a breakdown of Sarnia Corp prospective market or client groups, we can see that the company offers to OEMs (Original Equipment Manufacturers), Do-it-Yourself clients, repair and overhauling companies (MRO) and makers handling products made of leather, wood, plastic and metal. This diversity in customers suggests that Sarnia Corp can target has different alternatives in terms of segmenting the market for its new product particularly as each of these groups would be requiring the same type of product with respective changes in demand, quantity or product packaging. The client is not cost sensitive or brand name conscious so releasing a low priced dispenser under Sarnia Corp name is not a suggested option.
Sarnia Corp is not simply a maker of adhesives however delights in market leadership in the instantaneous adhesive industry. The business has its own experienced and certified sales force which includes worth to sales by training the company's network of 250 suppliers for helping with the sale of adhesives. Sarnia Corp believes in special circulation as suggested by the fact that it has picked to sell through 250 distributors whereas there is t a network of 10000 distributors that can be explored for broadening reach via distributors. The business's reach is not restricted to The United States and Canada just as it also delights in international sales. With 1400 outlets spread out all across The United States and Canada, Sarnia Corp has its in-house production plants instead of utilizing out-sourcing as the favored method.
Core competences are not limited to adhesive manufacturing just as Sarnia Corp also focuses on making adhesive giving devices to help with making use of its products. This double production strategy offers Sarnia Corp an edge over competitors since none of the rivals of giving devices makes instantaneous adhesives. Additionally, none of these rivals sells straight to the consumer either and utilizes distributors for connecting to customers. While we are looking at the strengths of Sarnia Corp, it is important to highlight the company's weak points also.
The business's sales personnel is skilled in training distributors, the reality stays 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 must also be kept in mind that the suppliers are revealing unwillingness when it pertains to selling equipment that needs maintenance which increases the obstacles of offering equipment under a specific brand.
If we look at Sarnia Corp product line in adhesive devices especially, the business has actually products targeted at the high-end of the market. The possibility of sales cannibalization exists if Sarnia Corp sells Case Study Help under the same portfolio. Given the reality that Case Study Help is priced lower than Sarnia Corp high-end line of product, sales cannibalization would absolutely be affecting Sarnia Corp sales earnings if the adhesive devices is offered under the company's brand.
We can see sales cannibalization impacting Sarnia Corp 27A Pencil Applicator which is priced at $275. There is another possible danger which could reduce Sarnia Corp income if Case Study Help is released under the company's trademark name. The truth that $175000 has actually been spent in promoting SuperBonder recommends that it is not a good time for introducing 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.
Furthermore, if we take a look at the market in general, the adhesives market does not show brand name orientation or cost consciousness which offers us 2 extra factors for not launching a low priced item under the business's trademark name.
The competitive environment of Sarnia Corp 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 purchaser in this market is low particularly as the purchaser has low knowledge about the product. While business like Sarnia Corp have handled to train suppliers concerning adhesives, the last consumer is dependent on distributors. Around 72% of sales are made straight by producers and suppliers for instantaneous adhesives so the purchaser has a low bargaining power.
Bargaining Power of Supplier: Given the truth that the adhesive market is dominated by three players, it could be said that the supplier delights in a greater bargaining power compared to the purchaser. The reality stays that the provider does not have much influence over the purchaser at this point particularly as the buyer does not reveal brand recognition or cost level of sensitivity. This shows that the distributor has the higher power when it comes to the adhesive market while the manufacturer and the purchaser do not have a major control over the real sales.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry revealed by foreign Japanese competitors in the instant adhesive market suggests that the market allows ease of entry. However, if we look at Sarnia Corp in particular, the company has dual capabilities in terms of being a producer of immediate adhesives and adhesive dispensers. Prospective hazards in devices giving industry are low which reveals the possibility of producing brand awareness in not just instant adhesives however likewise in dispensing adhesives as none of the industry players has actually managed to place itself in dual capabilities.
Danger of Substitutes: The threat of replacements in the immediate adhesive industry is low while the dispenser market in particular has replacements like Glumetic idea applicators, in-built applicators, pencil applicators and advanced consoles. The reality stays that if Sarnia Corp presented Case Study Help, it would be enjoying sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has actually offered different reasons for not introducing Case Study Help under Sarnia Corp name, we have actually a recommended marketing mix for Case Study Help given listed below if Sarnia Corp chooses 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 growth capacity of 10.1% which may be a good enough niche market segment for Case Study Help. Not just would a portable dispenser deal benefit 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 use with SuperBonder.
Price: The suggested rate of Case Study Help has actually been kept at $175 to the end user whether it is offered through suppliers or by means of direct selling. This cost would not include the expense of the 'vari idea' or the 'glumetic tip'. A rate listed below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle maintenance shop requires to purchase the product on his own. This would increase the possibility of influencing mechanics to acquire the item for use in their everyday maintenance jobs.
Sarnia Corp would just be getting $157 per unit as displayed in appendix 2 which offers a breakdown of gross profitability and net success for Sarnia Corp for launching Case Study Help.
Place: A distribution model where Sarnia Corp directly sends out the item to the local distributor and keeps a 10% drop delivery allowance for the distributor would be utilized by Sarnia Corp. Because the sales group is currently taken part in offering instant adhesives and they do not have knowledge in selling dispensers, involving them in the selling procedure would be pricey particularly as each sales call costs approximately $120. The distributors are already offering dispensers so selling Case Study Help through them would be a favorable alternative.
Promotion: A low promotional budget plan must have been designated 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 expenses incurred for production, the suggested advertising plan costing $51816 is advised for at first presenting the item in the market. The planned ads in publications would be targeted at mechanics in car maintenance shops. (Suggested text for the ad is displayed in appendix 3 while the 4Ps are summed up in appendix 4).
