Table of Contents
1. Case Summary
6. Problem Definition
(a) Analysis for Option 1: Launch Bond-A-Matic
(b) Analysis for Option 2: Both Applicators
(c) Analysis for Option 3 & 4: Prices
(d) Analysis for Option 6: Advertising according to Media Plan
(e) Analysis for Option 7: Advertising via Direct Mail
9. Option 1: Launch Bond-A-Matic
10. Option 2: Both Heads
11. Option 3: Price of 175 $ / 140 $
12. Option 4: Increase the sales price.
13. Option 5: Loctite Name and “Bond-A-Matic”
14. Option 6: Advertising according to Media Plan
15. Option 7: Advertising via Direct Mail – Program #2
16. Option 8: Expand distribution
17. Other Information That Should Be Obtained
Table of Figures:
Table of Sources
Loctite Corporation: Industrial Products Group
1. Case Summary
Industrial Products Group (IPG) is division of Loctite Corporation.
In the end of 1978, vice president Jeffrey Fox has to make decisions concerning the introduction of a new product – the Bond-A-Matic.
These decisions have a strong impact on Loctite’s other divisions, products, distribution channels and salesforce, and the existing marketing plan.
Market leader in development and marketing of adhesives and sealants.
Clear company structure: division of market under three profit centers - great worldwide presence, no internal competition between divisions.
Pays attention to internal opinions to make sure that new products get internal support: prerequisite to sell successfully in outside market
Strong growth of IPG sales (25%): FY 1978: 32,000,000 $ - FY 1979: 40,000,000 $
Long tradition in adhesives market - outstanding selling experiences and market knowledge.
Well-established brand, Strong brand awareness, Well-known company
Strong and good image that fits its strategy.
Reputation for high quality adhesives and equipment
Clearly stated objective: Premier worldwide marketer of instant adhesives for industrial use in 1985.
Clearly stated high-quality, high-price strategy in order to reach objective; adjusts activities to this strategy: prices above industry average, accepted by customers, selected range of loyal distributors, good market coverage, superior service: well-organised distribution system; professionalism of salespeople
customer orientation: knows importance of market research, employs it to keep customer orientation.
broad customer market coverage: industrial and consumer applications, OEMs and MROs
relationship management by IPG salesforce: - good, highly valued relationships with distributors, other customers, and distributors’ salespeople; services: help distributors plan inventory; demonstration, testing and recommendation of appropriate tool for specific applications; training; advisory meeting, newsletter model - Added value: gives expertise and experience to customers, works side by side with them.
Problem solving orientation: provides solutions to its customers, offers standard and custom-built adhesives and equipment: Strong marketing orientation. Tries to make service more attractive to distributors by its direct drop shipment arrangement. Product development according to needs of customers / users.
Corporate promotion and display materials.
Present in Anaerobics and cynoacrylates market.
70% of IPG sales from newer technologies (anaerobics and cyanoacrylates[CAs])
- no severe problems (contrary to mature technologies in adhesives market).
85% market share of anaerobics in North America (Loctite Corp.).
original patent holder: no imitations or copies yet; name is associated with anaerobics
alternative to traditional mechanical locking devices due to several advantages
industrial market is expected to grow by 26,42 % in 1979: good chance for Loctite to participate in this growth
own manufacturing of CAs
clear differentiation of Loctite’s two CAs and adjusted pricing strategy - prevents intenal cannibalisation: SuperBonder for new users: clear strategies: increase number of users - market development; increase purchase volume - market penetration
highest advertisement and promotion budget (175,000 $, 5% of sales) in industry - competitive advantage: good media planning: tries to solve problem of non-acceptance of adhesives ; 41,71 % growth in SuperBonder from FY 1977 to 1978; 6,75% of sales price for profit
awareness of clogging problem and thus development of Gluematic Tip.: QuickSet 404 for current users
substantial brand loyalty
existing need for Bond-A-Matic
extensive testing of new product
Could dispense both adhesives
Strong Systems Division: Responsible for over 15% of IPG’s sales.
Company / Bond-A-Matic
Higher commission for sales people on adhesives than on equipment.- discouraged to sell Bond-A-Matic.
Sales Forces’ inexperience in selling equipment - additional costs and efforts
Bond-A-Matic production problems: inability to serve large demand. Threat: dissatisfied customers - loss of image
Heavy requirements of customer service - no capacities to serve customers if Bond-A-Matic is introduced.
limited customers and use of anaerobics
Insufficient communication of obvious advantages to market: Not yet accepted by market (only 1 in 4 dollars spent for anaerobics)
high variable costs, industrial market is vulnerable, broad and fragmented, sparse information about identity of CA’s industrial users, no clear predictors for likely CA usage
 see 6. Problem Definition for details
 cf. 3. Weaknesses