Ch. 11 - Developing and Managing Products

CAT INC. does not introduce as many new products as other industries but rather modifications/differentiations of their pre-existing machinery/trucks/etc., or in other words, different models. Most of CAT INC.'s idea generation comes from their customers and consultants because they know more about the actual use and practice of machinery in a construction environment, meaning they know first hand what is missing and what would make things easier for x, y, and z.

During the business analysis stage CAT INC. figures out the demand, cost, sales, and profitability for the new idea, which in most cases are rather simple. Given the costs of normal machinery/trucks/products of their industry, new ideas will most likely profit. The profitability of new ideas within CAT INC. and their industry depends on the demand of said new idea(s). Many factors such as the economy, and economic trends, decide the success or failure of new ideas.

During the development stage, CAT INC. creates computer models to validate the design and concept of new ideas. Using computer models before creating the actual prototype helps the product development team(s) identify any issues in the early stages of design.

After the development stage CAT INC. usually unveils their prototypes/new ideas to the public through test marketing with conventions, company mixers, and etc.. When their prototype/new idea is unveiled they are able to gather new incite and suggestions from the public/customers which helps them make additional changes and tweaks, improving the overall design.

Ch. 16 - Promotional Planning for Competitive Advantage

Most of this chapter doesn't apply much to CAT INC. because their industry doesn't follow these practices.

Like I've discussed countless times before in previous blog posts, although CAT INC. is the best in their industry they don't use as much practices as other businesses/companies to put themselves out, this is because the nature of their industry address's this differently than the typical business/company.

Most of the time where there is interpersonal communication between CAT INC. and their target market is when they're holding a convention/meeting/mixer where there are some models/machines along with a presentation about the company and/or the models/machines present. The two main ways in which CAT INC. receives feedback is during these conventions/meetings/mixers as well as through routine check-ups on machines purchased by customers.

When public information about CAT INC. appears in the mass media as a news item it is usually through their company website, http://www.caterpillar.com/, where all their company information is available to the general public. Their public information may also appear time to time in newspapers or editorials when they receive rewards/certificates for outstanding practices or etc.. Other than these two channels there isn't much communication through mass media.

Ch. 10 - Product Concepts

One could say CAT INC. sells both business products (industrial products) and consumer products, however it really depends on the pretext in which it is viewed. Although CAT INC.'s customers are usually big businesses/organizations it doesn't mean that individuals purchase or rent out their machines as well. Because CAT INC. machines and services are more expensive than their competitors, to a certain degree, they are also viewed as heterogeneous shopping products. CAT INC. machines being recognized universally for their outstanding performance are viewed as heterogeneous shopping products because what their machines do can't be imitated  by others. CAT INC. has various product lines with varying differences. For example, CAT INC. may have various models for a certain truck or excavator but in the end the structures of each of them are pretty much identical with few to many distinguishing features (aka product modification). And like I've discussed in previous blog posts, when a CAT INC. machine/product is purchased they receive monthly check ups on the machine/product which is a variation of a warranty.

Every machine that CAT INC. produces has engines in them, and because they have engines in them they use greenwashing to a certain extent to increase sales as well as their image. Although CAT INC. doesn't boast about their technological advances in green marketing they do put it out in the open in annual reports and on their websites.

Ch. 18 - Sales Promotion and Personal Selling

Because CAT INC. doesn't rely entirely on the promotion/putting out of their services/products, they aren't as obligated as other companies/organizations to practice it.

CAT INC. focuses on three types of buyers; loyal customers, competitor's customers, and brand switchers. CAT INC. focuses on these types of buyers because of various factors, everyone of them being specific to their corresponding group.

Loyal Customers
Recognized as #1 in their industry, CAT INC. holds dear to their customers. The industry in which CAT INC. operates requires each and every corporation/organization to encourage, provide, and appeal to customers, all while meeting organizational goals. As discussed in previous blog posts, because CAT INC. is #1 in their industry, their pricing and services are expected to be the same, meaning that they're viewed as a last resort among some/most customers. In order to live up to the expectations brought upon the company/organization, CAT INC. must provide accordingly. When you purchase a CAT INC. machine or vehicle you will always be offered a premium; the premium given to you are certain services derived from their Financial sector which provides frequent checkups on the machine(s)/vehicle(s) you've purchased along with special payment plans and other benefits (loyalty marketing program and/or relationship selling).

Competitor's Customers and Brand Switchers
Like I've discussed in the previous blog post, Ch. 17, various types of advertisements exist in CAT INC. in order to increase sales and customers. Although CAT INC. is the best in their industry they still occasionally have to influence/persuade others into purchasing their products. One way in which CAT INC. helps with the transition of another product to theirs is by showing the potential customer(s) the capabilities of their product(s) firsthand (aka sampling), point-of-purchase display, and other practices.

Ch. 17 - Advertising and Public Relations

CAT INC.'s promotion/advertising doesn't occur much in their Machinery sector but more in their Financial sector. Big businesses/organizations don't usually have promotion sales because their income relies entirely on the sale and pricing of their products, but because CAT INC. isn't confined to one area of business (three sectors) they have more flexibility to use any practices required to keep themselves at the top of their industry.

CAT INC. focuses on two advertising practices; product advertising, and sometimes comparative advertising. Like any other business/organization product advertisement plays a important role. If you were to throw out a new product out of nowhere without describing the purpose of it, then the product would just sit there in the open and rot. CAT INC. rarely practices product advertisement because of their industry standing, however it doesn't mean that they are bad at it, merely that they don't have to rely on it as much as other businesses/organizations. An example of when CAT INC. practiced product advertisement would be the Brazilian quarry market, 2010. I've discussed this before in Ch. 2 - Strategic Planning for Competitive Advantage, but for those who haven't read it here is a recap. In 2010 CAT INC. noticed that they had a lack of sales in the Brazilian quarry market and later found out that it was because they were purchasing Brazilian company trucks which costed half the price of their trucks. CAT INC. then came up with a plan to increase sales in the Brazilian quarry market by demonstrating the capabilities of their trucks backed up with supporting data and so on. They also communicated with the quarry market the benefits of purchasing/using CAT INC. trucks compared to the Brazilian company trucks (CAT Financial sector, etc.). Product advertisement occurred when CAT INC. devised a plan to increase their sales and image in the Brazilian quarry market because they were publicizing/promoting their trucks.  Comparative advertisement was present as well because there was comparison amongst the trucks, Caterpillar and Brazilian.

Competitive advertisement isn't practiced as much in CAT INC. compared to other businesses/organizations because they are at the top of their industry with a great lead amongst their competitors. Like I've discussed in Ch. 6 - Consumer Decision Making, CAT INC. machines are viewed by businesses/organizations as a last resort because of pricing and other factors. The last resort itself is a form competitive advertisement. When someone compares or makes a derogatory statement about a product such as "x is better than this product because of y", or "why am I having this problem with x, I've never had this problem before with y", that is where competitive advertisement exists. This can't be said for every business/organization out there, but this is how it works for CAT INC..

Public relations/product placement is practiced with ease for CAT INC. because of their overwhelming amount of publicity and awards. All CAT INC. has to do in order to increase their public relations/product placement is to attend their award ceremony/party or etc., and just accept said award; simple as that. Most of CAT INC.'s awards are all the same, which is for Superior Quality Excellence Process, but even that alone helps them increase their public relations/product placement because it shows that they're doing something right. Another award that is usually given to CAT INC. is for Green Technology/Practices if I'm correct, and that to helps increase their public relations/product placement because it gives off a good image/feel to others, showing that they're reliable.