Loctite Corporation
Essay title: Loctite Corporation
Udara Bandara
Written case analysis ?V LOCTITE CORPORATION
Marketing Management
Product Policy Issues
a. Positioning: Should the BAM be promoted as a dispenser for instant adhesives, anaerobic, or both?
At the initial launch of the product BAM should focus more on anaerobic market as this market is the one that caters to the industrial users. Only 30% of the users are industrial users in the instant adhesives market and the product features and the cost of the product will suggest to the consumer that BAM is for industrial users and not for the occasional consumers.
However, the industrial users of instant adhesives market are growing in a rapid pace where it will overtake the consumer market growth soon. Therefore BAM should be introduced in both instant adhesives and anaerobic markets.
b. Name: Should the name ?§Bond-A-Matic?? or an alternative such as the Model 206?? be used?
The name ?§Bond-A-Matic?? suggests to the market that it is a new product with added and better features as it differentiates from other products of the company which have names like Model 200, Model 205 etc. This will give BAM a unique selling proposition from the company?¦s other similar products.
The name ?§Bond-A-Matic?? will also help with the introduction to the instant adhesives market as it will stimulate SuperBonder sales by association.
By choosing a name like ?§Bond-A-Matic?? will also help to avoid market cannibalization of the existing products of the company as it gives product differentiation to the market.(At least by name)
Should the Loctite name the prominently displayed on the BAM?
The Loctite name should be prominently displayed on the brand for it to get brand recognition from the market. It helps for a new product to have a popular brand name at the initial launch stage for it to grab the market quickly as a reputed brand will give customer some mental assurance of the product quality.
c. Models: Should both high – and low ?V pressure models be made available?
Both high and low pressure models should be made available as they serve different purposes. High pressure model for more viscous adhesives and low pressure model for less viscous adhesives. Both the models will be used in different industrial purposes as the consumer will have the choice to choose the best option suited for their purpose.
d. Assembly: Should BAM models be assembled internally or externally?
BAM models should be assembled internally as the cost saving for 500 units is only $875. {($17.50-$15.75)*500}. This cost saving when compared with the control the company has in assembling the units in-house is negligible as close supervision can be done about the quality of the product as the company reputation is online.
The second factor to be considered is whether the company has idle capacity to do this production. If the company is running at full capacity on their production lines, there will be an opportunity cost of producing these units in-house.
e. Needles: Should the Vari-Drop needle as well as the Gluematic tip be included with each unit?
The Vari-Drop applicator was designed for soft surfaces, where the Gluematic tip was especially suited to dispensing adhesives onto hard surfaces. As these components serve different purposes for different needs of the customers, both should be included with each unit with the option of buying the Vari-Drop applicator separately as this is 12.5% ($22.00) of the total cost. If the customer requirement was to dispense adhesives onto hard surfaces, the customer should have the option of only buying the Gluematic tip as it serves the required purpose.
f. Warranties and Trial Offers: Should Loctite offer either or both of these with the BAM
Since the main customers of BAM are going to be plant and production engineers of manufacturing companies, and at the moment they are reluctant to use ??chemical solution to a mechanical problem?¦ (Case page 3 second paragraph) it would be a good idea to give them a trial offer to impress them on this new technology to solve their gluing problems.