The following section focuses on the of marketing for Southland Corp C where the company's customers, competitors and core proficiencies have actually evaluated in order to validate whether the decision to launch Case Study Help under Southland Corp C brand would be a practical choice or not. We have firstly looked at the kind of customers that Southland Corp C handle 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 launching Case Study Help under Southland Corp C name.
Both the groups use Southland Corp C high efficiency adhesives while the business is not just involved in the production of these adhesives but also markets them to these consumer groups. We would be focusing on the consumers of instantaneous adhesives for this analysis because the market for the latter has a lower capacity for Southland Corp C compared to that of instantaneous adhesives.
The total market for immediate adhesives is around 890,000 in the US in 1978 which covers both consumer groups which have been recognized earlier.If we take a look at a breakdown of Southland Corp C prospective market or consumer groups, we can see that the business offers to OEMs (Initial Equipment Producers), Do-it-Yourself customers, repair work and upgrading companies (MRO) and manufacturers dealing in items made of leather, plastic, metal and wood. This diversity in clients recommends that Southland Corp C can target has various choices in terms of segmenting the market for its brand-new item especially as each of these groups would be requiring the very same type of item with respective modifications in quantity, demand or packaging. The client is not rate delicate or brand mindful so releasing a low priced dispenser under Southland Corp C name is not a suggested option.
Southland Corp C is not just a producer of adhesives but delights in market management in the instant adhesive industry. The company has its own proficient and competent sales force which adds value to sales by training the company's network of 250 distributors for assisting in the sale of adhesives. Southland Corp C believes in exclusive circulation as indicated by the fact that it has actually selected to offer through 250 suppliers whereas there is t a network of 10000 suppliers that can be checked out for broadening reach via distributors. The company's reach is not restricted to North America just as it also enjoys international sales. With 1400 outlets spread out all throughout North America, Southland Corp C has its internal production plants rather than utilizing out-sourcing as the favored method.
Core skills are not restricted to adhesive production only as Southland Corp C likewise concentrates on making adhesive giving devices to help with using its products. This double production strategy provides Southland Corp C an edge over competitors because none of the rivals of dispensing devices makes instantaneous adhesives. Furthermore, none of these competitors offers directly to the customer either and makes use of distributors for connecting to clients. While we are looking at the strengths of Southland Corp C, it is crucial to highlight the business's weak points.
Although the company's sales personnel is skilled in training suppliers, the fact remains that the sales group is not trained in offering devices so there is a possibility of relying heavily on suppliers when promoting adhesive devices. It must also be noted that the suppliers are showing reluctance when it comes to selling equipment that requires servicing which increases the obstacles of offering devices under a particular brand name.
If we look at Southland Corp C line of product in adhesive equipment particularly, the company has items aimed at the high-end of the marketplace. If Southland Corp C offers Case Study Help under the exact same portfolio, the possibility of sales cannibalization exists. Provided the truth that Case Study Help is priced lower than Southland Corp C high-end line of product, sales cannibalization would definitely be impacting Southland Corp C sales profits if the adhesive equipment is sold under the company's trademark name.
We can see sales cannibalization affecting Southland Corp C 27A Pencil Applicator which is priced at $275. If Case Study Help is introduced under the company's brand name, there is another possible threat which could decrease Southland Corp C earnings. The fact that $175000 has been spent in promoting SuperBonder recommends 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.
In addition, if we look at the market in general, the adhesives market does not show brand orientation or price awareness which gives us 2 extra reasons for not releasing a low priced item under the company's brand.
The competitive environment of Southland Corp C 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 product. While companies like Southland Corp C have actually handled to train distributors regarding adhesives, the final consumer is dependent on suppliers. Approximately 72% of sales are made straight by producers and suppliers for immediate adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Provided the fact that the adhesive market is dominated by 3 gamers, it could be said that the supplier takes pleasure in a greater bargaining power compared to the purchaser. Nevertheless, the fact remains that the provider does not have much influence over the buyer at this point specifically as the buyer 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 major control over the actual sales, this indicates that the supplier has the greater power.
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 indicates that the marketplace allows ease of entry. However, if we take a look at Southland Corp C in particular, the company has dual abilities in terms of being a producer of instantaneous adhesives and adhesive dispensers. Possible risks in equipment dispensing industry are low which reveals the possibility of producing brand awareness in not just instant adhesives however also in dispensing adhesives as none of the industry gamers has actually managed to place itself in dual capabilities.
Risk of Substitutes: The threat of alternatives in the instant adhesive industry is low while the dispenser market in particular has alternatives like Glumetic pointer applicators, built-in applicators, pencil applicators and advanced consoles. The reality remains that if Southland Corp C introduced Case Study Help, it would be delighting in sales cannibalization for its own products. (see appendix 1 for structure).
Despite the fact that our 3C analysis has given different reasons for not releasing Case Study Help under Southland Corp C name, we have a recommended marketing mix for Case Study Help provided listed below if Southland Corp C decides to proceed with the launch.
Product & Target Market: The target market selected for Case Study Help is 'Motor vehicle services' for a variety of reasons. There are currently 89257 establishments in this sector and a high use of roughly 58900 lbs. is being utilized by 36.1 % of the marketplace. This market has an additional growth potential of 10.1% which may be a sufficient specific niche market section for Case Study Help. Not only would a portable dispenser deal convenience to this particular market, the fact that the Do-it-Yourself market can likewise be targeted if a drinkable low priced adhesive is being cost use with SuperBonder. The product would be sold without the 'glumetic suggestion' and 'vari-drop' so that the consumer can decide whether he wants to go with either of the two devices or not.
Price: The recommended cost of Case Study Help has been kept at $175 to the end user whether it is sold through distributors or by means of direct selling. This rate would not include the cost of the 'vari suggestion' or the 'glumetic idea'. A price listed below $250 would not require approvals from the senior management in case a mechanic at a motor vehicle maintenance store requires to buy the item on his own. This would increase the possibility of influencing mechanics to buy the product for usage in their everyday maintenance jobs.
Southland Corp C would just be getting $157 per unit as displayed in appendix 2 which provides a breakdown of gross profitability and net success for Southland Corp C for introducing Case Study Help.
Place: A distribution model where Southland Corp C directly sends the product to the local supplier and keeps a 10% drop shipment allowance for the supplier would be used by Southland Corp C. Considering that the sales group is currently taken part in offering instantaneous adhesives and they do not have competence in offering dispensers, including them in the selling procedure would be expensive especially as each sales call costs roughly $120. The distributors are currently offering dispensers so selling Case Study Help through them would be a favorable alternative.
Promotion: Although a low advertising budget plan must have been assigned to Case Study Help however the fact that the dispenser is a development and it needs to be marketed well in order to cover the capital expenses incurred for production, the recommended marketing plan costing $51816 is recommended for at first introducing the item in the market. The planned ads in magazines would be targeted at mechanics in automobile upkeep shops. (Recommended text for the advertisement is shown in appendix 3 while the 4Ps are summarized in appendix 4).