The main differentiation of Bond-A-Matic between the other dispensers is price with Bond-A-Matic being cheaper and providing less precision. Yet, the market research study showed that 75% of purchasers from retail outlets and 67% from manufacturers and distributors did not care about price. Further, the competitors for dispensers are generally small with limited resources and serve either regional markets or particular industries so there is little reason to produce a cheap dispenser.
Also, the firms that buy adhesive are often small firms and there appears to be no correlation with firm size and the amount of adhseive to buy, so devising a marketing plan with production numbers and targeting specific customers will be difficult. Although the systems division had designed both Bond-A-Matics, they doubted they had the capacity to quickly manufacture large quantities. Further, the systems division was worried that it would be overwhelmed with calls for help for the new dispenser. If the company launched Bond-A-Matic and could not then adequately service or provide the product, the company's brand would be tarnished. 72% of purchasers from distributors and manufacturers said that technical service was important in their choice of instant adhesive supplier.
Also, the current sales force may not be as interested in learning about and selling the Bond-A-Matic as it does not traditionally sell equipment. But the bottom line is that a sales call for the sole purpose of selling the Bond-A-Matic is not cost effective so only existing customers can be targeted through the sales force. Further, they may not have the time during the call to push the Bond-A-Matic or more importantly, it may get substitituted. Should the product fail, the similarity of the name between SuperBonder and Bond-A-Matic may ruin the existing brand recognition.
Also, Fox's advertising target is an industry group that currently uses less than 27,350lb of adhesive with total growth potential...
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