Bond-a-Matic Essay

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Customer Analysis The total industrial consumption of cyano-acrylates which the new Bond-A-Matic 2000 would dispense was 265,000 pounds in FY 1978, expected to grow to about 335,000 pounds in FY 1979. Across 16 SIC categories, approximately 174,909 firms currently used cyano-acrylates (at a 15.5% market penetration.) 11% of CA users, i.e. approximately 19,240 firms used over 10 pounds of CAs per year, comprising at-least 75% of total current market. Assuming that growth in the CA segment stagnates, and that only heavy CA applicators would be interested in dispensing equipment the total market is still estimated at 19,240 users. About half of these users, i.e. ~10,000 firms have expressed an interest in investing in newer dispensing technology, leading us to believe that the market potential for the product is approximately 10,000 machines on a cautious basis. Assuming the growth projections for cyano-acrylate usage are accurate, the total number of firms purchasing the product in FY 1979 is estimated to be 270,000. Using these figures and assuming that both heavy and medium users (those buying between 1-9 pounds of cyano-acrylates per year) are potential customers; the maximum size of this market is estimated at 81,000 purchases. At 157.50 per unit, even with 100% penetration the market will not be worth more than $12.77 million in sales, with a more realistic estimate being $ 4 million in sales. The disparate nature of usage patterns across firms make it difficult to identify critical variables that can form the basis of segmenting the market. Possible ways to segment customers is on the basis of nature of the firm (small firm vs. large firm); sector of business (which industrial markets to target), current usage behavior (heavy CA usage vs low CA usage), nature of work (OEM vs MRO), and brand loyalty (SuperBonder usage vs competitors). Given that data about

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