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Module: CE00317-2 Management & Planning

Title: Marketing Strategy of JC Bamford Excavators Ltd

Student ID: 01911525 - Staffordshire University

EAT01205818 - Stoke-on-Trent College

Date: 7th January 2004

For the attention of: Geoff Leese

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Index

Index.............................................................................................................................2

Abstract........................................................................................................................3

The ‘JCB’ Brand...........................................................................................................3

Early Innovation & Marketing.......................................................................................3

Marketing Mix...............................................................................................................4

Product - Quality.......................................................................................................4

Product - Range........................................................................................................4

Product – Brand........................................................................................................5

Product – Service.....................................................................................................5

Price – Value............................................................................................................6

Promotion – Public relations.....................................................................................6

Promotion – Exhibitions............................................................................................6

Place – Locations.....................................................................................................7

Place - Transport......................................................................................................7

Market Segmentation...................................................................................................8

References...................................................................................................................8

Bibliography..................................................................................................................8

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Abstract

Research & analysis has been carried out on the marketing strategies of JC Bamford

Excavators Ltd, in how it takes its products to markets across the world. The report

covers how the companies marketing mix has changed over time, and how it

differentiates its products in the different markets segments that it operates.

The ‘JCB’ Brand

Joseph Cyril Bamford founded JC Bamford Excavators Ltd in 1945, where at the time

the company was run from a 12 x 15 ft garage in Uttoxeter, Staffordshire. The

company now has factories globally employing thousands, yet despite the enormous

growth of the company, it remains privately owned by the Bamford family, making it

one of the largest privately owned family businesses in the world.

JC Bamford Excavators Ltd is commonly known as ‘JCB’, which are the initials of its

founder Joseph Cyril Bamford. These three letters provided the company with the

basis for a simplistic logo that has always remained the same, with the very first

product to bear the logo being the backhoe loader in 1953. The JCB brand is so

strong that the acronym JCB is often used when referring to diggers, just as vacuum

cleaners are often referred to as hoovers. JCB also has an entry in the Oxford

English Dictionary:

JCB

  • noun Brit. trademark a type of mechanical excavator with a shovel at the

front and a digging arm at the rear.

— ORIGIN the initials of J. C. Bamford, the makers. (www.AskOxford.com)

Early Innovation & Marketing

The founder of JCB is said to have been a brilliant marketeer, lead by innovation,

which is evident by looking at how the company began. JCB started by producing a

core product of tipping trailers, and after three years started to focus on hydraulics in

producing Europe’s first hydraulic tipping trailer. Innovation then lead JCB into

producing mechanical arms powered by hydraulics that were attached to tractors as

tools, and by 1953 what started off as a tool had been developed into its own fully

functional machine no longer dependent on the chassis of a tractor. Now that JCB

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had a strong formal product branded with the JCB logo, Joseph added a novel

feature to the new 3C model that was launched in 1964. The 3C backhoe loader

come with the facility of being able to boil a kettle inside the cab, and every 3C

ordered would also be supplied with a JCB kettle delivered in person by Joseph

Bamford - from this point on no longer did JCB sell just a core/formal product, but

now a augmented product with additional benefits to rival its competitors. This

innovation and marketing excellence has followed through to the present day, by

means of diversifying into new markets, increasing brand loyalty, creating supporting

services to its main business and focusing on customer requirements.

Marketing Mix

As an established company, JCB have a strong marketing mix that has helped to

promote them to where they are today. JCB’s marketing mix is made from a

combination of a good range of quality products, fair pricing, good promotion and

vast product placement; each area comprising of one or more sub-elements, that

may overlap into another section of the mix.

Product - Quality

To see JCB’s ability in producing good quality products, clients need only look at their

history and achievements - JCB are the largest manufacture of backhoe loaders in

Europe which has been in manufacture for over 51 years, which in itself is testament

to the quality and success of their product. Also focusing on JCB’s attitude towards

quality rather than quantity is their website which states they do not aim to be the

largest manufacturer of commercial/industrial, agricultural and material handling

equipment, but the best. Marketing in this way by aiming to be the best would influent

prospective clients, helping to increase sales and therefore increase the size of the

company. Advertising an aim of wanting to be the largest manufacture would have no

impact on sales, as this aim would be an achievement of the company, and not

perceived as any benefit to prospective clients.

Product - Range

Another element of the marketing mix is the product range. After developing a best

seller, the 3C backhoe loader, JCB knew it would need more than one successful

product to sustain its growth, and so JCB’s product range has grown from just one to

between nine and thirteen product types, with130 to 160 different models. This is an

indication of how committed JCB are to new development, which has lead to the wide

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depth of products we now see today. So not only do JCB promote quality, but have a

good range of products for clients to choose from. This also shows how forward

looking the company is, by looking for gaps in the market place and listening to what

customers need. JCB have recently announced in a network newsletter that plans

have begun to produce their own diesel engines at a 160,000 sq ft plant in

Derbyshire, UK – another development in the JCB range

(http://www.jcb.com/newsletter/newsletter1.pdf - retrieved January 2004).

Product – Brand

As mentioned earlier, JCB have a strong brand name that is recognised globally, and

being a well-established company gives JCB an advantage. This brand will give

prospective clients confidence in the product, and could make the difference in a

prospective client choosing a JCB over a competitors. A strong brand identity has

immeasurable value to a company, as it is not an asset that can be brought or sold,

and building a strong brand takes time and hard work. To build and make use of the

strong JCB brand, the company have diversified into a number of markets, including:

Insurance

Training

Finance

Organic Food

Clothing

Toys

DIY Tools

Product – Service

To aid clients in purchasing and running JCB products, JCB have setup other

companies to support their main business. One support company, JCB Finance Ltd,

provides finance for the purchase of new JCB’s. Another support company, JCB

Insurance Ltd, provides insurance policies catered to the type of businesses likely to

use JCB equipment, such as rental or construction companies. Another company,

JCB Training Ltd, provides training on the operation of JCB machinery. Although

these companies were setup to support JCB’s main business activities, they also

function independently, for example JCB Finance Ltd will provide finance to

companies in general, providing the funds are not used to buy products in

competition to JCB. JCB Insurance Ltd also provides insurance to the public, motor

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insurance for example. These companies are also an example of how JCB have

diversified into finance, insurance and training markets.

Price – Value

For a product to sell it must be priced competitively, but with the strength of the

pound being so high in some countries this can sometimes prove difficult. In order for

JCB to be competitive while at the same time remaining profitable, JCB have

invested in manufacturing and assembly plants abroad. This enables JCB to source

parts in local countries at local prices and removes restrictions that may normally be

in place by import/export regulations. This is one reason why JCB opened a new

manufacturing plant in Georgia USA in 2000, to enable them to take a bigger share

of the US market.

Promotion – Public relations

JCB work hard on their public relations and do a number of things to constantly

improve their image with the public.

JCB landscape and conserve many acres of land at their World and US Head

Quarters helping the all types of wildlife and making the company very

environmentally friendly.

JCB have recently donated space to the US Air force museum at their US

head quarters, which will attract a lot of visitors to the vicinity of the JCB plant.

In the past four years JCB have donated at least:

o £50,000 to the NSPCC.

o £12,000 to comic relief

o A £35,000 3CX backhoe loader to an Elephant Sanctuary in Sri

Lanka.

o In 2002 diverted delivery of a 22 ton excavator to help repair flood

defences following major flooding in the Czech Republic.

o In 2001 loaned a £35,000 3CX to clear more than 1,000 tonnes of

waste in Bellingshausen, and trained five volunteer operators at

facilities in Derbyshire.

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o JCB are donating £1,000,000 worth of equipment to aid the clear up

operation in Asia following the tsunami disaster. This equipment is

being supplied by JCB India and other dealers in the affected regions.

Promotion – Exhibitions

In the early days Joseph Bamford would demonstrate the agility of their backhoe

loader by making it perform at exhibitions to astonished crowds, these shows are

now performed by a team of backhoe loaders and operators, who are now known as

the ‘Dancing Diggers’. The dancing diggers performed at Desert Inn in Las Vegas in

1999 where their performance was broadcast live on local television. Due to the high

interest, they performed again in Las Vegas at Conexpo 2002, a Construction

Exhibition, where they performed on stage every hour.

Place – Locations

With JCB having manufacturing plants on four continents and 542 registered dealers

with 930 locations worldwide, JCB is able to sell its products to over 150 countries.

JCB registered dealers can be supported by JCB sales that are located in the UK,

Australia, Belgium, Brazil, France, Germany, India, Italy, Netherlands, Spain & USA.

Due to the extent of JCB's distribution network, the company is able to spread the

risk of economic downturn in any one country, and by having manufacturing plants

on different continents allows JCB to compete better in target markets where the

pound is high, which lead to the development of JCB's manufacturing plant in

Georgia, USA opening in 2000. This $100,000 investment was due to JCB's desire to

take a greater share in the large US market. In my opinion it is not JCB's intension to

move manufacturing abroad as JCB currently export 70% of its UK production,

furthermore JCB's plants abroad are mainly for the production of their core product -

the backhoe loader, rather than their entire range. It is for these reasons I believe

JCB will only manufacture within local markets when they see a need to increase

their share in such markets, such as USA, as manufacturing locally allows JCB to be

more competitive by sourcing parts at local prices and evading duty and import

restrictions. Setting up manufacturing plants abroad is also expensive, so JCB are

only likely to do if they see a long term return on their investment in a particular

market. The current target markets are USA, Europe & the developing world.

Place - Transport

Due to the size and weight of JCB’s machinery, Joseph Bamford found it difficult to

transport their equipment for demonstrations to prospective buyers across the UK

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and Europe. For this reason JCB brought a company jet & helicopter, branded with

the company logo, so that prospective clients could be flown to and from JCB’s World

Head Quarters is the shortest possible time.

Market Segmentation

JCB target three market segments, they are agricultural, commercial/industrial &

ground care. JCB target a combination of their 9 to 13 product groups to each of the

three segments, of which some products overlap, with ground care having the

smallest number of product groups. This is because the requirements of ground care

companies are not as large as those of agricultural & commercial businesses; they

do not have a requirement for large excavating equipment.

References

AskOxford.com, Retrieved Jan 2005, from: http://www.askoxford.com/results/?

view=dict&field-

12668446=jcb&branch=13842570&textsearchtype=exact&sortorder=score%2Cname

JCB, 2005, Network Newsletter, retrieved Jan 2005 from:

http://www.jcb.com/newsletter/newletter1.pdf

Bibliography

JCB, 2005, Construction, Agricultural and Materials Handling Equipment,

http://www.jcb.com

Off-Highway Research, August 2004, Company Profile JCB.

http://www.offhighway.co.uk/samples/jcb.pdf

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