2398 Situational Analysis
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Transcript of 2398 Situational Analysis
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MARKETING PLAN
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Table of contents
EXECUTIVE SUMMARY ................................................................................................. 3
SITUATIONAL ANALYSIS: .............................................................................................4
I) MARKET DESCRIPTION: .........................................................................................6
II) MARKET SEGMENTATION: .................................................................................. 6
III) MARKET NEEDS: ................................................................................................... 6IV) MARKET SHARE (United States): .......................................................................... 7
V) MARKET GROWTH: ................................................................................................ 7
VI) SWOT Analysis: ........................................................................................................8
VII) Competitor Review: ................................................................................................. 9MARKETING STRATEGY ............................................................................................. 10
OBJECTIVES ................................................................................................................ 10
I) TARGET MARKETS: ............................................................................................... 11
MARKET SEGMENTATION: ................................................................................. 11Geographic Segmentation ..........................................................................................11
POSITIONING: .........................................................................................................14TARGETING STRATEGY: ......................................................................................14
PRICING STRATEGY: .............................................................................................15
DISTRIBUTION STRAEGY: ................................................................................... 15MARKETING ACTION: .................................................................................................. 16
What will be done? ....................................................................................................16
When will it be done? ................................................................................................16Who is responsible for doing it? ................................................................................ 16
How much will it cost? .............................................................................................. 18
BUDGET CONTROL ....................................................................................................... 18
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EXECUTIVE SUMMARY
The marketing plan is about the reach of Caterpillar in to the south
East Asian markets. And attain the first mover advantage of this virgin
market. The caterpillar corporation carries a gallant flag of global
corporation, having reach from North & South America to the
Australian pacific markets. The caterpillar corporation believes in thephenomenon of globalize business environment, this is why they achieve
excellence in production, distribution and Delivery world-wide.
Recently caterpillar launched its first product line of mining
equipments and cranes. It provided a relief to mining industry and
received an over whelming response from the markets. This product
line achieved the maturity stages quite earlier, which lead to the
expansion of products base.
This marketing plan focuses on the reach of caterpillar mining products
in to the South East Asian markets and the installation of caterpillar
power generation plants in to the developing nations having the
shortage of power.
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SITUATIONAL ANALYSIS:
Caterpillar Inc is established in 1925 since the year of its operation.
Caterpillar has established its name in their heavy machinery constructions,
complexed industrial equipments and heavy duty multi purpose vehicles
ranging from cairns, bulldozers, lifters, dumpers and demolishers. Today
Caterpillar is known as the market leaders in the fore mentioned industry.
Caterpillar is no more US based in fact, it has gone global. As Caterpillar
has been the first to explore and venture into the new markets following the
traditions it sees immense amount of potential in south East Asian markets.
In the recent years there were a lot of mines exploration work done in south
East Asian countries to exploit the natural resources beneath the Earth.
Alone in Pakistan, there are approx 23 mining projects are carried out and
more than 5 are under process. Some of these mines are the biggest in theworld. The mining equipment tools and techniques that are currently used in
Pakistan are not are not capable enough to exploit the full advantage of these
mines. Recently some international groups have shown their interest to help
Pakistani government in establishing the facilities and sharing the expertise
for the exploitation for the underground minerals like coal, lime stone,
soapstone, salt, gypsum, magnesium, iron and copper.
Caterpillar sees it as opportunity to establish the market for its mining
equipment and expanding its global reach to these newly developing
markets.
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Caterpillar Inc. manufactures and sells construction and mining equipment,
diesel and natural gas engines, and industrial gas turbines worldwide. Its
Machinery business engages in the design, manufacture, marketing, and sale
of construction, mining, and forestry machinery, such as track and wheel
tractors, track and wheel loaders, pipe layers, motor graders, wheel tractor-
scrapers, track and wheel excavators, backhoe loaders, log skidders, log
loaders, off-highway trucks, articulated trucks, paving products, skid steer
loaders, and related parts. This business also involves in the design,
manufacture, remanufacture, maintenance, and services of rail-related
products, as well as offers logistics services. The companys Engines
business designs, manufactures, markets, and sells engines for its machinery;
electric power generation systems; on-highway vehicles and locomotives;
marine, petroleum, construction, industrial, agricultural, and other
applications; and related parts. This business also remanufactures engines,
and various machine and engine components, as well as provides
remanufacturing services for other companies. Its Financial Products
business provides various financing alternatives to customers and dealers for
the companys machinery and engines, solar gas turbines, and other
equipment and marine vessels, as well as offers loans to customers and
dealers. This business also provides various forms of insurance to customers
and dealers to support the purchase and lease of its equipment; and invests in
independent power projects using Caterpillars power generation equipment
and services. Caterpillar markets its products through distribution centers. It
has a joint venture with Navistar International Corp. to manufacture and
distribute commercial trucks. The company was formerly known as
Caterpillar Tractor Co. and changed its name to Caterpillar, Inc. in 1986.
Caterpillar was founded in 1925 and is headquartered in Peoria, Illinois
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I) MARKET DESCRIPTION:
Country Total Mines Under Process Equipment
Pakistan 28 22 Traditional
India 54 33 Traditional
Iran 16 5 Traditional
Afghanistan 7 3 Traditional
Total 105 63 Efficiency 19 %
II) MARKET SEGMENTATION:
1. Geographic Segmentation
Realizing the market opportunity the CATERPILLAR aims to identify the
discussed geographical area as its potential segment.
III) MARKET NEEDS:
Few years ago, a lot of mines are explored and discovered in South East
Asian countries for the exploitation of natural resources beneath the Earth.
Alone in Pakistan, there are round about twenty three mining projects are
carried out and more than 5 are under process. Some of these mines are the
biggest in the world. The mining equipment tools and techniques that are
currently used in Pakistan are not are not capable enough to exploit the full
advantage of these mines. Recently some international groups have shown
their interest to help Pakistani government in establishing the facilities and
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sharing the expertise for the exploitation for the underground minerals like
coal, lime stone, soapstone, salt, gypsum, magnesium, iron and copper. So
caterpillar plans to collaborate with Pakistani Government regarding the
support to install the power generation facilities, and to invest in the mining
industry which will ultimately be beneficial for the both the stakeholders.
IV) MARKET SHARE (United States):
V) MARKET GROWTH:
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Once established, caterpillar projects to attain a very high growth in this
market, particularly In Pakistan according to an estimation they had ready
market purchases of more than 640 million Rupees in 2008, but the
purchases were made on contractual basis with large real estate builders and
developers like, KARKON, BAHRIA TOWN and HASHU real estate
groups, and all these purchases were from the product line of cranes,
dumpers and big movers and bulldozers.
VI) SWOT Analysis:
Strength:
1. Goodwill, Brand Image.
2. Global reach. Distributors all around the world.
3. The only producers of Mining equipment in the world.
4. Huge Product base.
5. Financing their own equipment
6. World-wide production (Europe, Australia, North & south
America)
Weaknesses:
1. Expensive Shipment
2. Difficult to mobilize the equipment
3. Operational Cost
Opportunities
1. Asian markets
2. Monopoly in mining equipment
3. Changing trends (petroleum fuels to Coal energy)
Threats:
1. Global recession
2. Rising operational cost
3. Law & order situation
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4. Global security issues
VII) Competitor Review:
Although caterpillar has been the only firm innovating in the industry of
heavy machines and vehicles development, but a lot of other national and
international companies have been plunging in to the same business and
offering a competition to cat.
One of the largest competitors to Caterpillar is Hitachi, Yamaha & Honda,
though these firms give caterpillar tough time in the cranes, generators,Motor turbines and engine, but if we look at the specialization these firms in
to the Mining Equipment production Caterpillar has no match. So Caterpillar
is virtually the only firm in the world to specialize in the production of the
mining equipments.
HEAVY INDUSTRIAL EQUIPMENT MAKERS
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Company Symbol Market Cap
United Technologies Corp. UTX 61.08B
Caterpillar Inc. CAT 33.90B
Mitsubishi Heavy Industries, Ltd.
HONDA
Deere & Co. DE 18.63B
YAMAHA YMH 48.92B
Illinois Tool Works Inc. ITW 22.67B
CNH Global NV CNH 4.37B
Parker Hannifin Corporation PH 8.55B
MARKETING STRATEGY
Caterpillar even in the times of economic hardship is trying its level best to
expand the customer base and go globally. Analyzing the position of the
target market caterpillar sees the great opportunity for the future.
Considering the launch of its mining line of products caterpillar aims to get
the FIRST MOVER ADVANTAGE in this virgin market of mining.
Caterpillar sets its objective in the following manners.
OBJECTIVES
First year Objective: To launch the caterpillar & to exploit the first
movers advantage in the mining equipment industry in south Asian
countries.
Second year Objective: To attain the targeted sales and expand the
distribution networks.
http://finance.yahoo.com/q?s=UTXhttp://finance.yahoo.com/q?s=CAThttp://finance.yahoo.com/q?s=DEhttp://finance.yahoo.com/q?s=ABBhttp://finance.yahoo.com/q?s=ITWhttp://finance.yahoo.com/q?s=CNHhttp://finance.yahoo.com/q?s=PHhttp://finance.yahoo.com/q?s=UTXhttp://finance.yahoo.com/q?s=CAThttp://finance.yahoo.com/q?s=DEhttp://finance.yahoo.com/q?s=ABBhttp://finance.yahoo.com/q?s=ITWhttp://finance.yahoo.com/q?s=CNHhttp://finance.yahoo.com/q?s=PH -
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Third Year Objectives: To sustain the sales and achieve the growth
in the third year of operations.
I) TARGET MARKETS:
i. Pakistan
ii. Afghanistan
iii. Iran
iv. India
MARKET SEGMENTATION:
Geographic Segmentation
The market is segmented on the basis of Geographic location, as we are well
aware that Caterpillar is a multi-national. It has its distribution centers
globally and reaching almost every market, therefore this marketing plan
aims to market its special line of mining equipment to the countries and
region where mining is still practiced in a very traditional and risky way.
The position strategy will definitely be to offer the same product line to
several markets of mining.
Traditional coal mining in the eastern part of India
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Modern Coal Mine in USA
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(Product) Mining Equipment OF Caterpillar
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POSITIONING:
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TARGETING STRATEGY:
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PRICING STRATEGY:
As caterpillar products are not like conventional super market products, they
are high priced and very difficult to ship so caterpillar offers its products on
lease and installments to its customers. This business also provides various
forms of insurance to customers and dealers to support the purchase and
lease of its equipment; and invests in independent power projects using
Caterpillars power generation equipment and services. Caterpillar markets
its products through distribution centers.
DISTRIBUTION STRAEGY:
Caterpillar plans to adopt two forms of distribution of its equipment in
Pakistan:
1. Distributional Outlets & showrooms in the Industrial capital of
Pakistan for the retail selling to its industrial customers.
KARACHI
LAHORE
2. Negotiating with the government of Pakistan & Ministry of Petroleum
& Natural Resources for the use of mining and extraction equipment.
Presentation and comprehensive proposal will be given to the
government to educate them about the use of caterpillar Mining
Equipment.
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MARKETING ACTION:
The caterpillar Corporation has an insignia developed around the globe.
CAT logo is well established in the market. CAT is not only popular in
production of heavy industrial equipment but also known for its
Organizational Safety and Health Equipment e.g. Construction Site
accessories (Safety helmet, Boots, Kits). So it will not be a difficult task for
CAT to establish its name in the market the insignia will pay off.
What will be done?
An extensive and vigorous marketing action will be taken by, Distributing
the printed shirts, Shoes, trousers, shelf at hardware stores, designing boards
for hardware shops and construction companies, offering safety accessories
and equipment to the labors at mining sites and mega construction projects.
To offer sponsorships to the mining projects and exploration researches.
When will it be done?
To strengthen in the Pakistani market, Caterpillar plan to run the marketing
operation exclusively for six months. In this six month the teams of
marketing personnel will reach the industrial & corporate clients and make
the market for initial sales to sustain the revenue.
Who is responsible for doing it?
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A team of senior marketing executives will be responsible for conducting the
operation in the market in three divisions.
Business Development Executive will be responsible for approach the
government and ministry to convince them for the use of caterpillar mining
machines and advocating them about the effectively and efficiency of
Caterpillar machines on the field.
Corporate sales executive will cater the entire industrial customer and will
deal with them, in order to generate sales for the sustainability the early ages
of the firm.
Business Promotions Executive will ensurethe acceptability of caterpillar inthe minds of the Pakistani Customers. For this the BPE will launch the teams
of marketing personnel in the market and mobilize them to create the
awareness about the caterpillar.
Country Marketing executive
Business development Executive Corporate sale executive Business promotion executive
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How much will it cost?
BUDGET CONTROL
Note: The budget allocation is forecasted for one year.
Activity Budget (Millions)Office and Corporate centers Rs.25 mn
Promotion and advertisement Rs.15 mn
Display centers and Outlets in industrial Estates Rs.50 mn
Salaries Rs.31 mn
Miscellaneous Rs.500 mn
Total Rs.621 mn
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