The following area focuses on the of marketing for Seitel Inc where the company's customers, competitors and core proficiencies have examined in order to validate whether the decision to release Case Study Help under Seitel Inc brand name would be a possible choice or not. We have actually to start with taken a look at the type of customers that Seitel Inc deals in while an evaluation 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 Seitel Inc name.
Seitel Inc customers can be segmented into two groups, commercial consumers and final customers. Both the groups use Seitel Inc high performance adhesives while the business is not just associated with the production of these adhesives however likewise markets them to these customer groups. There are two kinds of items that are being offered to these possible markets; instant adhesives and anaerobic adhesives. We would be concentrating on the consumers of immediate adhesives for this analysis considering that the marketplace for the latter has a lower potential for Seitel Inc compared to that of instant adhesives.
The overall market for instant adhesives is approximately 890,000 in the US in 1978 which covers both customer groups which have been identified earlier.If we take a look at a breakdown of Seitel Inc potential market or customer groups, we can see that the business sells to OEMs (Original Equipment Manufacturers), Do-it-Yourself customers, repair work and overhauling business (MRO) and makers handling items made from leather, plastic, wood and metal. This diversity in customers recommends that Seitel Inc can target has various choices in terms of segmenting the market for its new product specifically as each of these groups would be requiring the exact same type of product with particular modifications in need, packaging or quantity. The consumer is not price sensitive or brand name conscious so introducing a low priced dispenser under Seitel Inc name is not a recommended option.
Seitel Inc is not just a manufacturer of adhesives but enjoys market leadership in the instant adhesive market. The company has its own knowledgeable and competent sales force which adds value to sales by training the company's network of 250 suppliers for helping with the sale of adhesives. Seitel Inc believes in unique circulation as shown by the truth that it has selected to sell through 250 suppliers whereas there is t a network of 10000 distributors that can be checked out for broadening reach via suppliers. The company's reach is not restricted to North America only as it also enjoys global sales. With 1400 outlets spread all throughout The United States and Canada, Seitel Inc has its internal production plants rather than utilizing out-sourcing as the favored technique.
Core skills are not limited to adhesive manufacturing just as Seitel Inc likewise focuses on making adhesive dispensing equipment to facilitate making use of its products. This dual production strategy offers Seitel Inc an edge over rivals because none of the competitors of giving devices makes instant adhesives. Additionally, none of these rivals sells straight to the consumer either and makes use of suppliers for connecting to clients. While we are looking at the strengths of Seitel Inc, it is crucial to highlight the business's weaknesses.
The business's sales staff is competent in training distributors, the reality stays that the sales team is not trained in selling devices so there is a possibility of relying heavily on suppliers when promoting adhesive devices. It needs to also be kept in mind that the suppliers are showing unwillingness when it comes to offering devices that needs servicing which increases the difficulties of selling equipment under a particular brand name.
The company has actually products aimed at the high end of the market if we look at Seitel Inc item line in adhesive devices particularly. If Seitel Inc offers Case Study Help under the same portfolio, the possibility of sales cannibalization exists. Given the fact that Case Study Help is priced lower than Seitel Inc high-end product line, sales cannibalization would definitely be affecting Seitel Inc sales earnings if the adhesive devices is offered under the company's brand.
We can see sales cannibalization impacting Seitel Inc 27A Pencil Applicator which is priced at $275. There is another possible threat which could decrease Seitel Inc revenue if Case Study Help is launched under the company's brand name. The truth that $175000 has actually been spent in promoting SuperBonder suggests that it is not a good time for launching a dispenser which can highlight the fact that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instant adhesive.
Additionally, if we look at the marketplace in general, the adhesives market does not show brand name orientation or price awareness which offers us two additional reasons for not launching a low priced product under the company's brand.
The competitive environment of Seitel Inc would be studied through 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 item. While business like Seitel Inc have actually managed to train suppliers concerning adhesives, the last consumer depends on suppliers. Roughly 72% of sales are made straight by producers and distributors for immediate adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Given the reality that the adhesive market is dominated by 3 players, it could be said that the provider delights in a higher bargaining power compared to the purchaser. However, the fact stays that the supplier does not have much impact over the purchaser at this moment especially as the purchaser does disappoint brand name acknowledgment or cost level of sensitivity. When it comes to the adhesive market while the manufacturer and the purchaser do not have a significant control over the real sales, this shows that the supplier has the greater power.
Threat of new entrants: The competitive environment with its low brand commitment and the ease of entry revealed by foreign Japanese rivals in the immediate adhesive market shows that the marketplace permits ease of entry. Nevertheless, if we look at Seitel Inc in particular, the business has dual capabilities in terms of being a manufacturer of adhesive dispensers and instant adhesives. Prospective threats in devices dispensing market are low which shows the possibility of producing brand awareness in not only instantaneous adhesives but also in giving adhesives as none of the market gamers has handled to place itself in double abilities.
Risk of Substitutes: The hazard of substitutes in the instant adhesive market is low while the dispenser market in particular has alternatives like Glumetic idea applicators, built-in applicators, pencil applicators and advanced consoles. The reality remains that if Seitel Inc introduced 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 provided numerous reasons for not releasing Case Study Help under Seitel Inc name, we have actually a suggested marketing mix for Case Study Help offered listed below if Seitel Inc chooses to go ahead with the launch.
Product & Target Market: The target market picked for Case Study Help is 'Motor vehicle services' for a variety of reasons. There are currently 89257 establishments in this sector and a high usage of roughly 58900 lbs. is being utilized by 36.1 % of the marketplace. This market has an additional development capacity of 10.1% which might be a sufficient specific niche market segment for Case Study Help. Not just would a portable dispenser offer convenience to this particular market, the reality that the Diy market can likewise be targeted if a potable low priced adhesive is being cost usage with SuperBonder. The product would be sold without the 'glumetic tip' and 'vari-drop' so that the customer can choose whether he wishes to choose either of the two accessories or not.
Price: The suggested cost of Case Study Help has actually been kept at $175 to the end user whether it is sold through distributors or by means of direct selling. This cost would not consist of the expense of the 'vari idea' or the 'glumetic tip'. A cost below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle maintenance shop requires to acquire the item on his own. This would increase the possibility of affecting mechanics to buy the item for use in their day-to-day maintenance jobs.
Seitel Inc would only be getting $157 per unit as displayed in appendix 2 which provides a breakdown of gross profitability and net success for Seitel Inc for introducing Case Study Help.
Place: A circulation design where Seitel Inc directly sends out the item to the regional supplier and keeps a 10% drop delivery allowance for the supplier would be utilized by Seitel Inc. Since the sales group is already taken part in offering immediate adhesives and they do not have expertise in offering dispensers, involving them in the selling procedure would be costly specifically as each sales call costs around $120. The suppliers are already offering dispensers so selling Case Study Help through them would be a beneficial alternative.
Promotion: Although a low advertising budget ought to have been appointed to Case Study Help but 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 suggested advertising plan costing $51816 is suggested for initially introducing the product in the market. The planned ads in publications would be targeted at mechanics in car maintenance stores. (Suggested text for the advertisement is shown in appendix 3 while the 4Ps are summarized in appendix 4).