1. What are the advantages and disadvantages for Interscience associated with each of the two markets (contract laboratories Benelux and R & D laboratories Germany)? Advantages associated with contract laboratories Benelux:
The market share of contract labs is greatest, over two thirds of all unit sales of gas chromatographs are come from contract labs. The operation in this market is easier and thus less risky. It only required manufacturing basic models and then selling them at low prices to routine-applications laboratories. Disadvantages associated with contract laboratories Benelux: Contract labs are price-sensitive. The competition will be intense and only seeking for price competition which results in low profit growth rate. Advantages associated with R & D laboratories Germany:
The market potential of R&D laboratories is high. R&D laboratories highly demand on technical experiments and new product development, it comprises one-third of all gas chromatograph purchases. The profit and sales potential is high. R&D labs are not price sensitive customers. They are looking for high quality product and service so the company can charge them with price premium. The geographic location is near to current operation which saves costs of transportation and energy to monitor the market. Interscience also strengthens in the techniques and marketing strategies to serve the R&D lab customers. Disadvantages associated with R & D laboratories Germany: Lack of experience in marketing into this new market segment and it may be profit-losing if giving up the contract lab market.It is difficult or even costly to re-invent the selling approach to fit the new market. There are more than 15 local competitors in the Ruhr-Rhine market. Most of them have served the region for over 30 years. It will be difficult for an unknown Dutch firm to make inroads into the nationalistic and loyal German marketplace. 2. What is the value-in-use of the TRACE GC...
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