Product

Developed to solve difficulty faced by assembly line workers due to clogging in bottles.

Targeted towards the low-end market.

Breakeven quantity of 872 (low pressure) and 1265 (high pressure) equipment using
outsourcing.

To breakeven and achieve my target superbonder sales I have to sell 1 machine out of 50
potential customers. (SIC 20-39)

See the pages below for calculatons.

Market Analysis
Total Market Size (Assuming Superbonder Users as potential users of Bond-A-Matic): 110160 Pounds

Superbonders (20% growth)

Total sales projection Superbonder 1979 (lbs) 110160

Pounds/ Breakeven Machine (Low Pressure) 126.2749

Pounds/Breakeven Machine (High Pressure) 87.11989

Number of user establishments SIC 20-39 62916.96

Total Requirement of SIC 20-39 158250
LBS/Establishment 2.51522

1 sale out of = (LBS/Breakeven Machines)/(LBS/Establishment) 50.20431

Breakeven Analysis

Price to End Price to

Price to Price to User Distributor
` End User Distributor (Outsourcing) (Outsourcing)
Variable Cost 75 75 75 75
Assembly Cost per
unit 17.5 17.5 15.75 15.75
Total Variable Cost 92.5 92.5 90.75 90.75
R&D Cost 24000 24000 24000 24000
BAM Advertising Cost 25908 25908 25908 25908
Direct Mail
Advertising 34495 34495 34495 34495
Total Fixed Cost 84403 84403 84403 84403
Total Cost 84495.5 84495.5 84493.75 84493.75
Price 250 187.5 250 187.5
Break Even Value 535.9 888.5 530.0 872.4
 Price to Price to
Breakeven on High End Price to Price to End User Distributor
Pressure BAM User Distributor (Outsourcing) (Outsourcing)
Variable Cost 105 105 105 105
Assembly Cost per
unit 17.5 17.5 15.75 15.75
Total Variable Cost 122.5 122.5 120.75 120.75
R&D Cost 24000 24000 24000 24000
BAM Advertising Cost 25908 25908 25908 25908
Direct Mail
Advertising 34495 34495 34495 34495
Total Fixed Cost 84403 84403 84403 84403
Total Cost 84525.5 84525.5 84523.75 84523.75
Price 250 187.5 250 187.5
Break Even Value 662.0 1298.5 653.0 1264.5

DMU Analysis (Needs improvement):

55% instant adhesive users are small companies with DMU: Company president.

For other companies DMU: Production, RnD and Plant engineers.

Advertising should be directed to these DMUs.

Product Positioning

Already 205 and 200 console plus applicators are in the portfolio for quality users priced at
$725.

Competitors are pricing similar product at around $242.

Bond-A-Matic can compete with the rivals in low quality segment.

To avoid brand dilution it has to be released under a different brand name.

Brand Extension is not possible.

Channels (Incomplete)

IS this product the right solution?

Small organization which are predominant users come under the category of ignorant
customers. (71% require technical assistance)

Using this sophisticated equipment for them will require a lot of training.

Gluematic pen can better solve the problems faced by assembly workers.

Bond-A-Matic can be positioned in the low-end , low-quality segment who are looking for
automatic solution.

Recommendation:

Sell the product under a different brand name targeting the price sensitive segment of small
industries and customers
Solve problems of assembly workers by positioning Gluematic pen towards them.