Loctite Corporation: Industrial Products Group
Introduction
Based on Loctite Corporation’s reputation as a high quality manufacturer of adhesives and associated equipment, and the unique skills and compensation structure of the Loctite salesforce, we do not recommend that Mr. Fox begin a full-scale launch of the Bond-A-Matic 2000. With uncertainties regarding brand image, advertising, manufacturing, sales force training, and distribution, the launch would not contribute to the company reaching its goal of becoming the premier marketer of instant adhesives for industrial use by 1985. Instead, Loctite’s focus should remain on instant adhesives and changes should be made to the existing distribution system to obtain this goal.
Brand Dilution
The Bond-A-Matic launch threatens the high quality image of the Loctite brand name. Loctite intends to sell the Bond-A-Matic dispenser at $175 – a price that several executives argue will negatively impact the reputation of Loctite. Thanks to a strong advertising campaign, Loctite has established “favorable brand name recognition” for the SuperBonder adhesive (Quelch) and this reputation could be harmed because of the similar product names if the Bond-A-Matic launch is not successful.
Advertising concerns are also an issue. The first concern is whether or not the price should be included in the advertising of the dispenser. Further, as Bond-A-Matic is a new product with a different customer set, there is a question to how much emphasis will actually be placed on the Loctite name. Again, if the product is unsuccessful, the overall Loctite brand name will be damaged. Also, there is concern on how advertising should actually be used – simply to develop awareness or attempt to generate sales orders. There is also the concern that advertising may not be sufficient to reach the entire potential customer base. In order to reach more potential buyers of Bond-A-Matic, direct-mail has been considered as an addition to basic advertising. With so many concerns and
Based on Loctite Corporation’s reputation as a high quality manufacturer of adhesives and associated equipment, and the unique skills and compensation structure of the Loctite salesforce, we do not recommend that Mr. Fox begin a full-scale launch of the Bond-A-Matic 2000. With uncertainties regarding brand image, advertising, manufacturing, sales force training, and distribution, the launch would not contribute to the company reaching its goal of becoming the premier marketer of instant adhesives for industrial use by 1985. Instead, Loctite’s focus should remain on instant adhesives and changes should be made to the existing distribution system to obtain this goal.
Brand Dilution
The Bond-A-Matic launch threatens the high quality image of the Loctite brand name. Loctite intends to sell the Bond-A-Matic dispenser at $175 – a price that several executives argue will negatively impact the reputation of Loctite. Thanks to a strong advertising campaign, Loctite has established “favorable brand name recognition” for the SuperBonder adhesive (Quelch) and this reputation could be harmed because of the similar product names if the Bond-A-Matic launch is not successful.
Advertising concerns are also an issue. The first concern is whether or not the price should be included in the advertising of the dispenser. Further, as Bond-A-Matic is a new product with a different customer set, there is a question to how much emphasis will actually be placed on the Loctite name. Again, if the product is unsuccessful, the overall Loctite brand name will be damaged. Also, there is concern on how advertising should actually be used – simply to develop awareness or attempt to generate sales orders. There is also the concern that advertising may not be sufficient to reach the entire potential customer base. In order to reach more potential buyers of Bond-A-Matic, direct-mail has been considered as an addition to basic advertising. With so many concerns and