CATERPILLAR & ITS DEALERSHIPS The history of the track-type tractor dates to 1904 when two separate but similar ideas we
Posted: Fri Jul 01, 2022 9:10 am
CATERPILLAR & ITS DEALERSHIPS The history of the track-type tractor dates to 1904 when two separate but similar ideas were tested, with the first patent issued in 1907 for a continuous track tractor known colloquially as a 'Caterpillar'. The Caterpillar Tractor Company was formed in 1925 and its manufacturing plant in East Peoria, Illinois was one of the major industrial sites in the USA by the 1930s. In 1951 the company opened its first overseas manufacturing facility, in the United Kingdom. By the year 2000, Caterpillar manufactured more than 300 models for a range of industries, including construction, mining, power generation, heavy goods vehicle manufacture and locomotive manufacture. In 2017, it employed over 98,000 people with revenues of over $45bn. Caterpillar's machines are often integral to their user's operations; downtime can mean inconvenience and financial losses. Services provided through its renowned dealer network therefore aim to deliver whatever it is customers need to ensure uptime - be that data, advisory support or full-time fleet management - while also enabling the customer to operate their fleet as efficiently and effectively as possible. In 2005, Caterpillar's outgoing CEO launched 'Vision 2020', its fifteen-year enterprise strategy for growth. A key aspect of the strategy was to work closely with its impressive dealer network to 'be the global benchmark in delivering integrated business solutions to customers'. Caterpillar and its dealers had to become less product-focused and more customer outcome-focused to deliver such a high standard of solutions.
CUSTOMER SUPPORT AGREEMENTS There are over 180 Caterpillar dealers globally, managing customer relationships, servicing equipment and providing parts. By 2005, Customer Support Agreements (CSAs) had been offered in various forms by dealers for years. However, patchy sales, disappointing contract renewal rates and unreliable delivery had led to doubts about their ability to generate profits. Caterpillar realised that services needed to be much more standardised among its dealers (e.g. what was included in the service offering, the description and marketing of services, delivery systems and KPIs). As the manufacturer whose name was on the product, it needed to lead this standardisation exercise across its dealer network. 2 OUTPACING THE COMPETITION A key motivating factor for focusing on services as a core part of the competitive strategy was to stay ahead of the competition both from third party providers and other manufacturers: Third party service providers service a company's entire fleet of vehicles, made by any manufacturer, and being internationally organised (unlike Caterpillar dealers which are territorially-based) they give the customer the flexibility to work on national or international projects without having to use several dealerships for services. Small local workshops, often set up by exCaterpillar dealer mechanics, also compete on repairs, as do in-house mechanics employed by companies with larger fleets. The supply of cheaper non-Caterpillar parts via aftermarket distributors accounts for 30- 50% of the spare parts aftermarket. Customers with mixed fleets of vehicles from both Caterpillar and its competitors, such as Komatsu and Volvo, compare product support offers between.
Question 4
A key motivating factor for Caterpillar is focusing on services as a core part of the competitive strategy to stay ahead of the competition both from third party providers and other manufacturers. Drawing from this insight and your knowledge of “Shared marketing strategy components” fully explain how Caterpillar marketers may be saving costs by using a shared marketing strategy
CUSTOMER SUPPORT AGREEMENTS There are over 180 Caterpillar dealers globally, managing customer relationships, servicing equipment and providing parts. By 2005, Customer Support Agreements (CSAs) had been offered in various forms by dealers for years. However, patchy sales, disappointing contract renewal rates and unreliable delivery had led to doubts about their ability to generate profits. Caterpillar realised that services needed to be much more standardised among its dealers (e.g. what was included in the service offering, the description and marketing of services, delivery systems and KPIs). As the manufacturer whose name was on the product, it needed to lead this standardisation exercise across its dealer network. 2 OUTPACING THE COMPETITION A key motivating factor for focusing on services as a core part of the competitive strategy was to stay ahead of the competition both from third party providers and other manufacturers: Third party service providers service a company's entire fleet of vehicles, made by any manufacturer, and being internationally organised (unlike Caterpillar dealers which are territorially-based) they give the customer the flexibility to work on national or international projects without having to use several dealerships for services. Small local workshops, often set up by exCaterpillar dealer mechanics, also compete on repairs, as do in-house mechanics employed by companies with larger fleets. The supply of cheaper non-Caterpillar parts via aftermarket distributors accounts for 30- 50% of the spare parts aftermarket. Customers with mixed fleets of vehicles from both Caterpillar and its competitors, such as Komatsu and Volvo, compare product support offers between.
Question 4
A key motivating factor for Caterpillar is focusing on services as a core part of the competitive strategy to stay ahead of the competition both from third party providers and other manufacturers. Drawing from this insight and your knowledge of “Shared marketing strategy components” fully explain how Caterpillar marketers may be saving costs by using a shared marketing strategy