Case Analysis: "Loctite Corporation: Industrial Products Group"

Case Analysis
“Loctite Corporation: Industrial Products Group”
Submitted in partial fulfilment of

B2B Marketing
Submitted to
Prof. Bipul Kumar
Department of Marketing
Indian Institute of Management, Indore
Submitted by
Section: B2B B, Group Number: 10
Ankita Sharma 2020PGP044
Aravind Prasad 2020PGP061
Hrishikesh Kayshap 2017IPM052
Rahul Agarwal 2020PGP326
Rohit Kumar Pandey 2020PGP347
Saurabh Chipade 2020PGP378
Problem Statement
Jeffery Fox, VP Marketing of Loctite Corporation’s Industrial Products Group had to decide
whether to recommend a full scale launch of Bond-A-Matic (BAM) 2000 in 1979 or not? If yes,
what marketing strategy to follow?
Objectives for 1979

1. Increase revenue of SuperBonder from $3.44 mn in 1978 to $4.5 mn in 1979
2. Attain at least 35% market share in SICs 20 to 39
Analysis of CAs in Industrial Market

Overall the CAs demand is expected to grow by 20% Y-o-Y but the demand growth for CA in
Industrial Market is 26.42% (From 265000 lbs in 1978 to 335000 lbs in 1979). Firm size was a
poor predictor of CA demand in industrial users and small firms were relatively heavy users.
Analysis of SuperBonder Sales

The quantity sales of SuperBonder had grown 47.71% in 1978 (From 62150 lbs in 1977 to
91800 lbs in 1978). The average selling price of SuperBonder was $37.45 which was less than
a third of $129.40 for Quick Set 404. This indicates that SuperBonder was targeted for small
and medium sized firms. If the average selling price for SuperBonder remains same in 1979
then 120161 lbs (an increase of 30.89% from 1978) of SuperBonder needs to be sold to achieve
$4.5 mn revenue. If Loctite can sustain the growth achieved in 1978 then it should comfortably
achieve the target for 1979 but since the small and medium size firms are heavy users of CAs,
hence it is important to consider the launch of BAM 2000 which is a complement to
SuperBonder and will help to sustain the demand growth.
Break Even Analysis

Detailed analysis is available in the attached Excel Workbook
Target Market: SIC 33 to 39 with Moderate use of CAs annually
Recommendation
Based on analysis, it is recommended to go ahead with a full scale launch of BAM 2000 to
achieve the IPG’s objectives for 1979. Specifically, Loctite should focus on selling BAM 2000 to
small and medium sized firms within the industry groups SIC 33 to 39 which moderately use one
to 9 pounds of CAs annually.
Pricing Strategy
It is recommended that Loctite should set $200 as the price to End User and $150 as the price
to the distributor (providing 25% margin) for BAM 2000. At these price points, the break even
market share within SIC 33 to 39 is 21.16% in direct to end user and 34.05% through distributor.
Loctite is highly likely to achieve these market shares given that SuperBonder has 34.64%
market share in the industrial market for CAs. This would also be a conservative and realistic
scenario as break even market share required is close to current market share of 34.64%.
Advertising Strategy
Logo: As the BAM 2000 was a dispenser of the SuperBonder series of adhesives which were
closely associated with the Loctite name, it is imperative that the Loctite name is also
associated with the dispenser that they are trying to sell. Not only would the dispenser aid in
increasing the use of CAs, it would also take away several hassles in the use of CAs such as
wastage, protection of users’ fingers and eliminate mess including benefits such as precise
placement of of adhesive and anti-clogging like the Gluematic Pen but on a larger scale for
Loctite’s industrial users. Loctite’s brand association with the BAM 2000 and a potential failure
of it would not likely jeopardize the SuperBonder name and brand recognition, if the BAM 2000
is offered with a one-time limited warranty offering. As selling and promotion of the BAM 2000
was also recommended to be linked with SuperBonder packs (1lb or 10 - packs of 1oz) via
brochures and reply cards, association with the Loctite brand did not pose any extra risk.
Product Quality: The two BAM 2000 models were developed after extensive testing and by the
System Division which had developed many mass market equipment to aid the use of Loctite
products. Even in the case of breakdown of the product, the one year warranty would ideally not
jeopardize sales of SuperBonder or Loctite products.
Direct-Mail Program: To encourage sales and adoption of BAM 2000, Loctite should use the
direct mail program by purchasing a $675 list with 16740 names of firms in SIC categories 33 to
39 which moderately use one to 9 pounds of CAs annually. The proposed media schedule
should be followed in conjunction with SuperBond advertising.
Distribution Strategy
Loctite should leverage its strong relationships with the distributors which account for over 50%
current sales of SuperBond adhesives and should provide incentives by offering 25% margin to
sell BAM 2000 as a complement to all SuperBond adhesives. Alongside, Loctite should use its
own salespeople to sell BAM 2000 directly to end users.

Case Analysis: "Loctite Corporation: Industrial Products Group"

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Case Analysis: "Loctite Corporation: Industrial Products Group"

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Case Analysis

“Loctite Corporation: Industrial Products Group”

Submitted in partial fulfilment of

Ankita Sharma 2020PGP044

Aravind Prasad 2020PGP061

Hrishikesh Kayshap 2017IPM052

Rahul Agarwal 2020PGP326

Rohit Kumar Pandey 2020PGP347

Saurabh Chipade 2020PGP378

Objectives for 1979

Analysis of CAs in Industrial Market

Analysis of SuperBonder Sales

Break Even Analysis

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