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Warner Music Group Case Study Solution
Warner Music Group Case Study Help
Warner Music Group Case Study Analysis
The following section focuses on the of marketing for Warner Music Group where the business's consumers, rivals and core competencies have actually examined in order to justify whether the choice to release Case Study Help under Warner Music Group brand would be a practical option or not. We have actually to start with looked at the type of customers that Warner Music Group handle while an examination of the competitive environment and the business's strengths and weak points follows. Embedded in the 3C analysis is the reason for not launching Case Study Help under Warner Music Group name.
Warner Music Group clients can be segmented into two groups, last customers and commercial customers. Both the groups use Warner Music Group high performance adhesives while the business is not only associated with the production of these adhesives however also markets them to these consumer groups. There are 2 kinds of products that are being offered to these possible markets; anaerobic adhesives and instant adhesives. We would be concentrating on the customers of immediate adhesives for this analysis because the marketplace for the latter has a lower capacity for Warner Music Group compared to that of instant 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 determined earlier.If we take a look at a breakdown of Warner Music Group potential market or customer groups, we can see that the business sells to OEMs (Initial Equipment Makers), Do-it-Yourself clients, repair and overhauling companies (MRO) and makers handling products made of leather, plastic, wood and metal. This variety in customers suggests that Warner Music Group can target has different choices in terms of segmenting the marketplace for its brand-new item particularly as each of these groups would be needing the same kind of item with respective modifications in need, quantity or product packaging. However, the customer is not rate sensitive or brand name mindful so releasing a low priced dispenser under Warner Music Group name is not a recommended choice.
Warner Music Group is not simply a producer of adhesives however delights in market management in the immediate adhesive market. The business has its own experienced and qualified sales force which adds value to sales by training the company's network of 250 distributors for assisting in the sale of adhesives. Warner Music Group believes in exclusive distribution as suggested by the truth that it has actually chosen to offer through 250 suppliers whereas there is t a network of 10000 suppliers that can be checked out for expanding reach through suppliers. The company's reach is not restricted to The United States and Canada just as it also enjoys global sales. With 1400 outlets spread all throughout North America, Warner Music Group has its internal production plants instead of utilizing out-sourcing as the preferred method.
Core skills are not limited to adhesive manufacturing only as Warner Music Group also concentrates on making adhesive dispensing equipment to facilitate the use of its products. This dual production method gives Warner Music Group an edge over rivals given that none of the rivals of giving equipment makes instantaneous adhesives. Additionally, none of these rivals offers straight to the customer either and makes use of suppliers for connecting to customers. While we are looking at the strengths of Warner Music Group, it is essential to highlight the business's weaknesses.
The company's sales personnel is experienced in training distributors, the reality remains that the sales team is not trained in selling equipment so there is a possibility of relying heavily on suppliers when promoting adhesive devices. It ought to also be noted that the suppliers are showing reluctance when it comes to offering equipment that requires maintenance which increases the challenges of offering equipment under a specific brand name.
The business has actually products aimed at the high end of the market if we look at Warner Music Group product line in adhesive equipment particularly. If Warner Music Group offers Case Study Help under the same portfolio, the possibility of sales cannibalization exists. Provided the fact 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 revenue if the adhesive equipment is offered under the company's brand name.
We can see sales cannibalization impacting Warner Music Group 27A Pencil Applicator which is priced at $275. If Case Study Help is introduced under the business's brand name, there is another possible risk which might lower Warner Music Group income. The fact that $175000 has been invested in promoting SuperBonder recommends that it is not a great time for introducing a dispenser which can highlight the truth that SuperBonder can get logged and Case Study Help is the anti-clogging solution for the instantaneous adhesive.
Additionally, if we look at the market in general, the adhesives market does not show brand orientation or rate awareness which provides us two extra reasons for not launching a low priced product under the company's brand.
The competitive environment of Warner Music Group would be studied by means of Porter's five forces analysis which would highlight the degree of rivalry in the market.
Bargaining Power of Buyer: The Bargaining power of the buyer in this industry is low particularly as the buyer has low understanding about the item. While business like Warner Music Group have handled to train suppliers concerning adhesives, the last consumer is dependent on suppliers. 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: Provided the truth that the adhesive market is dominated by 3 players, it could be said that the provider takes pleasure in a greater bargaining power compared to the buyer. The reality stays that the provider does not have much influence over the buyer at this point particularly as the buyer does not reveal brand recognition or price sensitivity. This suggests that the distributor has the greater power when it comes to the adhesive market while the manufacturer and the purchaser do not have a major control over the actual sales.
Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry revealed by foreign Japanese rivals in the immediate adhesive market shows that the market enables ease of entry. Nevertheless, if we take a look at Warner Music Group in particular, the business has dual capabilities in terms of being a producer of adhesive dispensers and instant adhesives. Potential dangers in equipment dispensing industry are low which reveals the possibility of creating brand awareness in not just instantaneous adhesives however also in dispensing adhesives as none of the industry gamers has handled to place itself in double capabilities.
Risk of Substitutes: The danger of replacements in the instant adhesive industry is low while the dispenser market in particular has substitutes like Glumetic idea applicators, built-in applicators, pencil applicators and sophisticated consoles. The truth remains that if Warner Music Group introduced Case Study Help, it would be indulging in sales cannibalization for its own items. (see appendix 1 for structure).
Despite the fact that our 3C analysis has actually provided different reasons for not releasing Case Study Help under Warner Music Group name, we have a recommended marketing mix for Case Study Help offered listed below if Warner Music Group chooses to go ahead with the launch.
Product & Target Market: The target market chosen for Case Study Help is 'Motor car services' for a number of reasons. This market has an additional growth capacity of 10.1% which might be a good adequate specific niche market segment for Case Study Help. Not just 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 sold for usage with SuperBonder.
Price: The suggested price of Case Study Help has been kept at $175 to the end user whether it is offered through distributors or via direct selling. A rate listed below $250 would not need approvals from the senior management in case a mechanic at a motor lorry maintenance store requires to acquire the product on his own.
Warner Music Group would only be getting $157 per unit as shown in appendix 2 which gives a breakdown of gross success and net profitability for Warner Music Group for introducing Case Study Help.
Place: A circulation design where Warner Music Group directly sends the product to the local supplier and keeps a 10% drop delivery allowance for the supplier would be utilized by Warner Music Group. Given that the sales team is already participated in offering instantaneous adhesives and they do not have knowledge in offering dispensers, involving them in the selling procedure would be pricey especially as each sales call expenses around $120. The distributors are currently selling dispensers so offering Case Study Help through them would be a favorable alternative.
Promotion: A low marketing budget must 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 incurred for production, the suggested marketing strategy costing $51816 is suggested for initially presenting the product in the market. The prepared advertisements in publications would be targeted at mechanics in lorry upkeep stores. (Suggested text for the ad is shown in appendix 3 while the 4Ps are summarized in appendix 4).
