2398 situational analysis

8/3/2019 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.
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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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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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Forcastedsales

2398 situational analysis

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