The following section concentrates on the of marketing for Warner Music Group where the company's customers, competitors and core competencies have examined in order to validate whether the choice to launch Case Study Help under Warner Music Group trademark name would be a possible choice or not. We have actually to start with taken a look at the kind of customers that Warner Music Group handle while an assessment of the competitive environment and the company's strengths and weaknesses follows. Embedded in the 3C analysis is the justification for not releasing Case Study Help under Warner Music Group name.
Warner Music Group consumers can be segmented into 2 groups, industrial clients and final customers. Both the groups utilize Warner Music Group high performance adhesives while the company is not only associated with the production of these adhesives but likewise markets them to these client groups. There are 2 kinds of items that are being offered to these prospective markets; anaerobic adhesives and instantaneous adhesives. We would be focusing on the consumers of instantaneous adhesives for this analysis given that the market for the latter has a lower potential for Warner Music Group compared to that of immediate adhesives.
The overall market for instantaneous adhesives is around 890,000 in the United States in 1978 which covers both client groups which have actually been recognized earlier.If we look at a breakdown of Warner Music Group possible market or client groups, we can see that the business sells to OEMs (Initial Equipment Producers), Do-it-Yourself customers, repair work and upgrading companies (MRO) and producers handling items made from leather, plastic, metal and wood. This diversity in customers suggests that Warner Music Group can target has numerous options in terms of segmenting the market for its new product specifically as each of these groups would be needing the same kind of product with particular modifications in quantity, packaging or need. However, the consumer is not rate sensitive or brand mindful so releasing a low priced dispenser under Warner Music Group name is not a suggested choice.
Warner Music Group is not simply a manufacturer of adhesives but enjoys market management in the immediate adhesive market. The company has its own knowledgeable and certified sales force which includes worth to sales by training the business's network of 250 distributors for facilitating the sale of adhesives. Warner Music Group believes in exclusive circulation as shown by the truth that it has chosen to sell through 250 distributors 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 The United States and Canada just as it also delights in worldwide sales. With 1400 outlets spread all across The United States and Canada, Warner Music Group has its in-house production plants instead of using out-sourcing as the favored strategy.
Core competences are not limited to adhesive production just as Warner Music Group also specializes in making adhesive giving devices to facilitate the use of its items. This dual production strategy provides Warner Music Group an edge over competitors because none of the rivals of giving devices makes immediate adhesives. Additionally, none of these rivals sells straight to the consumer either and uses distributors for connecting to customers. While we are looking at the strengths of Warner Music Group, it is crucial to highlight the company's weaknesses.
The company's sales staff is skilled in training suppliers, the truth remains that the sales team is not trained in offering equipment so there is a possibility of relying greatly on suppliers when promoting adhesive devices. Nevertheless, it needs to likewise be kept in mind that the suppliers are showing unwillingness when it comes to selling devices that requires servicing which increases the difficulties of offering devices under a particular brand name.
If we look at Warner Music Group product line in adhesive devices particularly, the business has actually products targeted at the high-end of the marketplace. The possibility of sales cannibalization exists if Warner Music Group sells Case Study Help under the exact same portfolio. Provided the reality that Case Study Help is priced lower than Warner Music Group high-end product line, sales cannibalization would certainly be impacting Warner Music Group sales profits if the adhesive devices is offered under the company's brand.
We can see sales cannibalization affecting Warner Music Group 27A Pencil Applicator which is priced at $275. There is another possible hazard which could decrease Warner Music Group earnings if Case Study Help is introduced under the business's trademark name. The truth that $175000 has actually been invested in promoting SuperBonder suggests 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 instant adhesive.
Furthermore, if we look at the market in general, the adhesives market does not show brand name orientation or price awareness which offers us two extra factors for not launching a low priced product under the company's brand name.
The competitive environment of Warner Music Group would be studied by means of Porter's five forces analysis which would highlight the degree of competition in the market.
Bargaining Power of Buyer: The Bargaining power of the purchaser in this industry is low specifically as the purchaser has low understanding about the product. While business like Warner Music Group have handled to train suppliers concerning adhesives, the last consumer is dependent on distributors. Around 72% of sales are made straight by makers and distributors for instantaneous adhesives so the buyer has a low bargaining power.
Bargaining Power of Supplier: Offered the reality that the adhesive market is controlled by three players, it could be said that the supplier takes pleasure in a greater bargaining power compared to the purchaser. The fact remains that the provider does not have much impact over the purchaser at this point specifically as the purchaser does not reveal brand name recognition or cost level of sensitivity. When it comes to the adhesive market while the purchaser and the manufacturer do not have a significant control over the real sales, this indicates that the distributor has the greater power.
Threat of new entrants: The competitive environment with its low brand name commitment and the ease of entry revealed by foreign Japanese competitors in the immediate adhesive market indicates that the market allows ease of entry. Nevertheless, if we take a look at Warner Music Group in particular, the business has double abilities in regards to being a manufacturer of adhesive dispensers and instantaneous adhesives. Prospective hazards in devices dispensing market are low which shows the possibility of producing brand name awareness in not only instantaneous adhesives but also in giving adhesives as none of the market gamers has actually managed to position itself in dual abilities.
Danger of Substitutes: The risk of alternatives in the immediate adhesive market is low while the dispenser market in particular has alternatives like Glumetic pointer applicators, inbuilt applicators, pencil applicators and sophisticated consoles. The fact remains that if Warner Music Group introduced Case Study Help, it would be indulging in sales cannibalization for its own products. (see appendix 1 for structure).
Despite the fact that our 3C analysis has provided numerous reasons for not introducing Case Study Help under Warner Music Group name, we have a suggested marketing mix for Case Study Help provided listed below if Warner Music Group 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 growth capacity of 10.1% which may be an excellent adequate specific niche market section for Case Study Help. Not just would a portable dispenser offer benefit to this specific market, the truth that the Do-it-Yourself market can likewise be targeted if a safe and clean low priced adhesive is being offered for use with SuperBonder.
Price: The recommended price of Case Study Help has been kept at $175 to the end user whether it is sold through suppliers or through direct selling. A rate below $250 would not require approvals from the senior management in case a mechanic at a motor car maintenance store needs to acquire the item on his own.
Warner Music Group would just be getting $157 per unit as displayed in appendix 2 which provides a breakdown of gross profitability and net success for Warner Music Group for releasing Case Study Help.
Place: A distribution model where Warner Music Group straight sends out the item to the regional distributor and keeps a 10% drop shipment allowance for the distributor would be utilized by Warner Music Group. Because the sales group is already engaged in selling immediate adhesives and they do not have expertise in offering dispensers, involving them in the selling process would be expensive particularly as each sales call expenses approximately $120. The suppliers are already selling dispensers so selling Case Study Help through them would be a favorable alternative.
Promotion: A low advertising spending plan should have been appointed to Case Study Help but the fact that the dispenser is an innovation and it requires to be marketed well in order to cover the capital expenses sustained for production, the recommended marketing strategy costing $51816 is advised for initially introducing the item in the market. The planned advertisements in publications would be targeted at mechanics in car upkeep stores. (Suggested text for the ad is displayed in appendix 3 while the 4Ps are summarized in appendix 4).