The following section concentrates on the of marketing for Texas Eastman Co where the business's customers, rivals and core competencies have actually evaluated in order to justify whether the choice to release Case Study Help under Texas Eastman Co trademark name would be a possible option or not. We have to start with taken a look at the kind of consumers that Texas Eastman Co deals in while an examination of the competitive environment and the business's strengths and weak points follows. Embedded in the 3C analysis is the justification for not releasing Case Study Help under Texas Eastman Co name.
Texas Eastman Co customers can be segmented into 2 groups, industrial consumers and last customers. Both the groups use Texas Eastman Co high performance adhesives while the business is not only involved in the production of these adhesives but likewise markets them to these customer groups. There are 2 types of products that are being offered to these potential markets; immediate adhesives and anaerobic adhesives. We would be focusing on the consumers of immediate adhesives for this analysis since the market for the latter has a lower capacity for Texas Eastman Co compared to that of instantaneous adhesives.
The overall market for instant adhesives is approximately 890,000 in the US in 1978 which covers both customer groups which have actually been determined earlier.If we look at a breakdown of Texas Eastman Co possible market or customer groups, we can see that the company offers to OEMs (Initial Equipment Makers), Do-it-Yourself consumers, repair work and overhauling business (MRO) and makers handling items made of leather, wood, plastic and metal. This variety in clients recommends that Texas Eastman Co can target has different options in regards to segmenting the market for its brand-new item specifically as each of these groups would be requiring the exact same type of product with respective modifications in product packaging, amount or need. The customer is not cost sensitive or brand conscious so releasing a low priced dispenser under Texas Eastman Co name is not a recommended option.
Texas Eastman Co is not just a manufacturer of adhesives however enjoys market leadership in the immediate adhesive market. The company has its own knowledgeable and certified sales force which includes value to sales by training the company's network of 250 suppliers for facilitating the sale of adhesives. Texas Eastman Co believes in special circulation as indicated by the fact 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 distributors. The company's reach is not limited to North America just as it likewise enjoys global sales. With 1400 outlets spread out all across North America, Texas Eastman Co has its internal production plants rather than utilizing out-sourcing as the preferred method.
Core skills are not restricted to adhesive manufacturing just as Texas Eastman Co also concentrates on making adhesive giving devices to help with the use of its products. This double production method gives Texas Eastman Co an edge over competitors given that none of the rivals of dispensing equipment makes instant adhesives. Additionally, none of these rivals offers straight to the consumer either and utilizes suppliers for connecting to customers. While we are looking at the strengths of Texas Eastman Co, it is crucial to highlight the business's weaknesses.
Although the company's sales staff is knowledgeable in training distributors, the reality stays that the sales group is not trained in offering equipment so there is a possibility of relying heavily on suppliers when promoting adhesive devices. It needs to likewise be noted that the distributors are revealing reluctance when it comes to selling equipment that requires maintenance which increases the difficulties of selling equipment under a particular brand name.
If we look at Texas Eastman Co line of product in adhesive devices particularly, the business has actually products targeted at the high-end of the market. If Texas Eastman Co offers Case Study Help under the exact same portfolio, the possibility of sales cannibalization exists. Given the truth that Case Study Help is priced lower than Texas Eastman Co high-end line of product, sales cannibalization would certainly be affecting Texas Eastman Co sales profits if the adhesive devices is offered under the company's brand.
We can see sales cannibalization affecting Texas Eastman Co 27A Pencil Applicator which is priced at $275. There is another possible threat which could lower Texas Eastman Co profits if Case Study Help is released under the business's brand. The reality that $175000 has actually been invested in promoting SuperBonder suggests that it is not a good time for releasing 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.
Additionally, if we take a look at the market in general, the adhesives market does not show brand orientation or rate awareness which provides us two extra factors for not introducing a low priced item under the company's brand name.
The competitive environment of Texas Eastman Co 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 industry is low specifically as the purchaser has low knowledge about the item. While companies like Texas Eastman Co have actually managed to train suppliers relating to adhesives, the last consumer is dependent on suppliers. Around 72% of sales are made directly by manufacturers and distributors for immediate adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Provided the reality that the adhesive market is dominated by 3 players, it could be stated that the provider takes pleasure in a greater bargaining power compared to the buyer. However, the reality remains that the provider does not have much impact over the purchaser at this moment particularly as the buyer does disappoint brand recognition or rate level of sensitivity. This suggests that the supplier has the greater power when it pertains to the adhesive market while the maker and the buyer 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 revealed by foreign Japanese competitors in the immediate adhesive market indicates that the marketplace permits ease of entry. If we look at Texas Eastman Co in particular, the company has double capabilities in terms of being a producer of immediate adhesives and adhesive dispensers. Possible hazards in equipment dispensing industry are low which shows the possibility of producing brand awareness in not just immediate adhesives however likewise in giving adhesives as none of the market players has managed to place itself in dual abilities.
Threat of Substitutes: The threat of alternatives in the instantaneous adhesive industry is low while the dispenser market in particular has alternatives like Glumetic suggestion applicators, built-in applicators, pencil applicators and sophisticated consoles. The truth remains that if Texas Eastman Co introduced Case Study Help, it would be enjoying sales cannibalization for its own items. (see appendix 1 for framework).
Despite the fact that our 3C analysis has offered different reasons for not releasing Case Study Help under Texas Eastman Co name, we have actually a recommended marketing mix for Case Study Help provided below if Texas Eastman Co decides to go ahead with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor vehicle services' for a number of reasons. This market has an extra development potential of 10.1% which might be a great enough specific niche market segment for Case Study Help. Not just would a portable dispenser deal benefit to this particular market, the truth that the Do-it-Yourself market can also be targeted if a potable low priced adhesive is being sold for use with SuperBonder.
Price: The recommended price of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or via direct selling. This cost would not consist of the cost of the 'vari tip' or the 'glumetic suggestion'. A cost below $250 would not need approvals from the senior management in case a mechanic at an automobile maintenance store requires to purchase the product on his own. This would increase the possibility of influencing mechanics to acquire the product for usage in their everyday maintenance jobs.
Texas Eastman Co would just be getting $157 per unit as displayed in appendix 2 which provides a breakdown of gross profitability and net success for Texas Eastman Co for launching Case Study Help.
Place: A distribution design where Texas Eastman Co straight sends out the product to the regional supplier and keeps a 10% drop shipment allowance for the supplier would be utilized by Texas Eastman Co. Because the sales group is already engaged in selling immediate adhesives and they do not have expertise in selling dispensers, including them in the selling procedure would be expensive specifically as each sales call costs roughly $120. The suppliers are currently offering dispensers so selling Case Study Help through them would be a favorable option.
Promotion: Although a low advertising budget ought to have been assigned to Case Study Help but the fact 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 strategy costing $51816 is suggested for at first presenting the item in the market. The prepared ads in magazines would be targeted at mechanics in lorry maintenance stores. (Recommended text for the advertisement is shown in appendix 3 while the 4Ps are summed up in appendix 4).