Marketing Strategy - Caterpillar

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Marketing Strategy - Caterpillar

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Themes

Automobile, Caterpillar, ecosystem, risks, Vargo and Lusch, Marketing strategies, global competition, construction machinery, growing competition, product-oriented, service-oriented, Caterpillar business model, CSA Customer Service Agreements, Pepe Brousset, MPC Marketing profit center, Latin American market, different actors, optimal operation, value proposition, problem identification, background

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Abstract

Despite the global competition, the American construction machinery company, Caterpillar, is still the leader today partly thanks to the quality of its machines. However, to cope with growing competition, quality, producing a defect-free product or service right from the beginning (Gummesson, 2007) is not enough to stand out. Because the company could not distinguish itself by prices, it had to find another solution: producing a value proposition that customers need and want (Gummesson, 2007). Fortunately, very early on, Caterpillar changed its strategy from product-oriented to service-oriented.

Background and problem identification
From Caterpillar to dealers
From dealers to customers
Implications

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Extract

[...] Lusch (2004). "Evolving to a New Dominant Logic for Marketing", Journal of Marketing, 1-17. Vargo, Stephen L., and Robert F. Lusch (2016). "Institutions and axioms: an extension and update of service-dominant logic," Journal of the Academy of Marketing Science, 5-23. [...]

[...] Indeed, one of Caterpillar's challenges is that the dealer in charge of dialoguing with the final customer has trust in Caterpillar itself and must have the necessary knowledge to convince the customer to commit to a CSA. It would therefore be interesting to train them by passing on knowledge to them and to set up a common discourse with all dealers. The dealers will then be able to tailor their speech to the customer's needs. Implications These two suggestions would also bring new challenges to Caterpillar. [...]

[...] All this is based on relationships of trust while favoring dialogue between all actors. In order to achieve this, it seems important to adopt an overall vision through the ecosystem. The creation of this ecosystem requires the integration of market knowledge for the enterprise (Vargo & Lusch, 2016). More concretely, Caterpillar can train local employees but also suppliers. All stakeholders must be adapted to the territory within the ecosystem. Thus, thinking in terms of the ecosystem will make up for the lack of teamwork and communication. References Akaka, Melissa. A. and Stephen L. [...]

[...] Vargo (2015). "Extending the context of service: from encounters to ecosystems," Journal of Services Marketing, 453-462. Grönroos, Christian (2017). "On value and value creation in service: a management perspective," Journal of Creating Value, 125-141. Gummesson, Evert (2007). "Exit services marketing-enter service marketing," Journal of Customer Behaviour, 113-141. Lusch, Robert F. and Stephen L. Vargo (2014). Service-dominant logic: premises, perspectives, possibilities, Cambridge: Cambridge University Press Vargo, Stephen L. and Robert F. [...]

[...] To sum up, one of Caterpillar's strengths is its long, trusting relationships with many dealers. This is why it is in Caterpillar's interest to create this same type of relationship with dealers already established on the Latin American market. In order to create a strong bond of trust between Caterpillar and the dealers, it would be necessary to have MPCs also established in these countries. From Dealers to Customers Caterpillar knows how to analyze machine problems but is not able to determine what the customer is satisfied with. [...]

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