The case of Loctite Corporation
- Introduction
- IPG's current position
- Market structure
- Locking device
- IPG's sales by product line
- IPG's objective and strategy
- Objective
- Comparison between adhesives and CA's
- Characteristics of distributors
- IPG strategy for CA
- Market attractiveness
- Role of BAM in IPG's product line
- Complementary versus substitute
- Loctite contribution data
- Product/company fit
- Likely reaction to BAM
- BAM Marketing Program
- Recommendations
- Product issues
- Pricing
- Communication
Loctite Corporation was a leader in the development and marketing of high performance adhesives and sealants for industrial and consumer application.
This case can be analyzed in five parts based on Industrial Products Group (IPG); a division of Loctite Corporation
1. IPG's current position
2. IPG's objective and strategy
3. Bond-A-Matic (BAM)'s role in IPG product line (Product/Market and Product/Company Fit)
4. Likely reaction to BAM
5. BAM Marketing Program.
IPG was dealing with Adhesives and Cyanoacrylates (CA). However, as given in the case, Mechanical device market was four times bigger. Company was growing at 25% each year and 70% of revenues were from Anaerobics and CAs. Company had 3 divisions-
IPG- accounting for 25% of Loctite Sales.
Woodhill Permatex- accounting for 34% of sales.
Loctite International- accounting for 41% of sales.
[...] Based on Amount of Adhesives Applied: In low usage industry, BAM can be focused In high usage industry, Model 200 and Model 205 can be focused Product/Company Fit: Low priced Dispenser complements Equipments Fits with IPG objectives and Strategy Add to Loctite reputation Based on Market need High quality image of equipment Likely reaction to BAM: Response of System Division Response of IPG sales force Response of Distributors System Division estimated that it secured half the dollar market for instant adhesive applicator, control consoles and dispensing heads in North America. [...]
[...] On the other hand, the Loctite sales force had not traditionally focused on selling equipments. There was confusion as whether they would be interested in learning to demonstrate the BAM and to determine which model and Tip best fit each intended application. There was also a risk that, given the limited time of any sales call, sales people would either ignore the new dispenser, push it at the expense of Loctite's basic products. It was also suspected that sales force reaction would depend on the willingness of Loctite's Distributors to stock the BAM Dispenser and necessary accessories. [...]