Loctite Inc.
BBM – Case 3
Loctite Corporation - International Distribution
Case Assignment Questions
1. What is Loctite’s distribution strategy?
Loctite’s distribution strategy is to have their sealants and adhesive products reach world wide demographic segments. Loctite offers industrial products and consumer based products. Loctite’s strategy is a work from the bottom up plan. They first focus on what their consumers want, and then they build up a distribution network from there. They do not start their own distribution centers. They always collaborate, whether it is a joint venture, subsidiary, independent distributor, etc. It also relies heavily on the relationships that Loctite has with distributors. When expanding to a new area, higher ups listen to their current distributors in a near by region to suggest who to partner with in the next region over. If Loctite is working with a new distributor, they put in effort to train people about their product and how to market/sell it. Loctite relies heavily on the relationships it builds and works hard to make sure the company will benefit from distributing Loctite products.
2. How would you compare direct sales, independent distribution, captive distribution, and agents for Loctite’s core products?
The direct sales method works best in Loctite’s North America distribution region. This is because Loctite knows the personality of the region the best and how to make a large sale happen. In North America, Loctite does not need and intermediate distributor to buffer the sales between Loctite and the final consumer. In fact, in the year 1992, direct sales to large end users made up 40% of Loctite’s industrial level business in North America. Loctite will set up an agreement with independent distributors where they own 51% of the joint venture. This technique works better in regions where there are a lot of different countries with different cultures that Loctite does not know much about. For example, Loctite
Loctite Corporation - International Distribution
Case Assignment Questions
1. What is Loctite’s distribution strategy?
Loctite’s distribution strategy is to have their sealants and adhesive products reach world wide demographic segments. Loctite offers industrial products and consumer based products. Loctite’s strategy is a work from the bottom up plan. They first focus on what their consumers want, and then they build up a distribution network from there. They do not start their own distribution centers. They always collaborate, whether it is a joint venture, subsidiary, independent distributor, etc. It also relies heavily on the relationships that Loctite has with distributors. When expanding to a new area, higher ups listen to their current distributors in a near by region to suggest who to partner with in the next region over. If Loctite is working with a new distributor, they put in effort to train people about their product and how to market/sell it. Loctite relies heavily on the relationships it builds and works hard to make sure the company will benefit from distributing Loctite products.
2. How would you compare direct sales, independent distribution, captive distribution, and agents for Loctite’s core products?
The direct sales method works best in Loctite’s North America distribution region. This is because Loctite knows the personality of the region the best and how to make a large sale happen. In North America, Loctite does not need and intermediate distributor to buffer the sales between Loctite and the final consumer. In fact, in the year 1992, direct sales to large end users made up 40% of Loctite’s industrial level business in North America. Loctite will set up an agreement with independent distributors where they own 51% of the joint venture. This technique works better in regions where there are a lot of different countries with different cultures that Loctite does not know much about. For example, Loctite