Loctite Corporation: Industrial Products Group Essay

1006 Words Apr 16th, 2011 5 Pages
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
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While some executives believe the select distribution outlets provide sufficient courage, others feel Loctite should move toward a more extensive distribution system. The need for broader outreach to new outlets will stretch the sales force that works in conjunction with the distributors to make client calls, and recommend and demonstrate products. The introduction of the new applicator might undermine these efforts. Distributors sold over 50% of the SuperBonder adhesives, but did not traditionally stock product without track records or equipment that could require servicing. Without this sales outlet, a full-launch of the Bond-A-Matic would likely not be effective.
It is clear that Loctite’s launch of the Bond-A-Matic would be a brand extension rather than a line extension and result in brand dilution. Such a launch would clearly focus on specific customer needs “at the request of the marketing group following the 1977 Sales Leadership Conference” (Quelch, 5) while ignoring the effect on the Loctite Corporation overall and Loctite’s competitors. From the company view, Loctite manufactures high margin and high quality products; however, the Bond-A-Matic would be a low margin and low cost piece of equipment. Additionally, the sales force is not trained to sell the Bond-A-Matic. Extensive training of the sales force would

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