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.

Ch. 15 - Retailing

Place visited: McDonalds

McDonalds being a franchise, offers almost the same product and services as any other McDonalds all depending on their location. For example, the way one product or service is practiced in one McDonalds may be different than others because of regional differences. Boasting a whopping 33,000+ restaurants around the world in 118 countries, McDonalds is one of the leading franchises. Being a restaurant type franchise, McDonalds doesn't use many retailing practices and relies solely on commercials and other picture orientated advertisements/retailing to help persuade people to buy the product. Along with most McDonald advertisements/retailing they usually talk about the prices being low and tend to over-exaggerate things when in reality the product you get is nothing like the pictures portrayed in the advertisement/retailing.

Although McDonalds does tend to disappoint people/customers when new products are released (mostly the burgers), they do have a good enough retailing mix to keep them coming back. Promotion of their products is a very important role to McDonalds because it will determine whether or not that product will sell or not. If they introduced a new product without promoting it beforehand then no one would know that such a product even existed. Along with promotion comes presentation and pricing. Like I discussed earlier, McDonalds relies heavily on picture orientated advertisements/retailing which are meant to give off a "delicious" or "worth the money" image. If all of McDonald's burgers were shown in their advertisements/retailing as the way they "really are/look like" then they would most definitely see a drop in sales because they don't give off much appeal. Same thing can be said about the pricing; if a product sells for $5, then by all means it better be worth $5. Lets use an example; the double cheeseburger:

What the product really looks like

What the product looks like in their advertisment

Because the double cheeseburger practically replaced the regular cheeseburger on the dollar menu (roughly $1.20 at most McDonalds), people don't care about the appearance of the product, they mostly care about the price. If the double cheeseburger wasn't on the dollar menu and costed lets say $3.00 instead of $1.00, the burger might actually still sell, however that would only happen if the product "looked the same as it did in the advertisement". If the double cheeseburger didn't sell for $3.00 McDonalds wouldn't be in much trouble because of the wide variety and mix of products being offered to the customers/consumers (diversity). Atmosphere also plays a important role in day to day McDonalds operations because it influences the mood of customers and employees. Ask yourself "would I want to sit down and eat here again if I had a choice?", if you answer yes then that means that particular venue (it can be any restaurant or etc.) has a good atmosphere. If a McDonalds looked like a run down restaurant with dust, cobwebs, and etc., it would give off a bad impression and vice versa. If a McDonalds restaurant looked classy, clean, and sophisticated, then it would give off a good impression which in turn would bring in more re-occurring customers.

Ch. 6 - Consumer Decision Making

Recognition

CAT INC. is recognized as #1 in their industry, providing not only machinery but diversified plans and services to back it up. Usually when big companies or organizations construct new buildings/firms they use Caterpillar machinery, which shows that their machines are very dependable and worth the investment/money. Of course not every company or organization may use Caterpillar, maybe to save money or some other reason, but CAT INC.'s machinery are viewed by those companies and/or organizations as a last resort.

Certificate of Supplier Quality Excellence Process

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Information Search, Evaluation of Alternatives, and Purchase

Recognition and Information Search goes hand in hand because they both rely on each other. When a company, organization, or individual wishes to purchase a CAT INC. machine they usually do research beforehand to determine whether or not the machine/product is for them which brings up a important question, "Is this something that I want or is this the something that I need?"  When you research a product online (it can be any product) you will most likely find a evaluation page or something similar to it where people rate the product(s). People who have previously bought or used said product will give their review on it for others to see, it can be good or bad depending on the product. Good reviews/ratings will provide the company, organization, or individual who is researching a product more incentive to make a purchase because it has been given the appraisal of others; also vice versa, if the product has bad reviews/rating then they will have less incentive to make a purchase because it has been judged as a horrible product by others.

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Post Purchase Behavior

Because CAT INC. is at the top of their industry, they always meet or exceed customer expectations. When customer expectations are met they will be more prone to give good reviews for the product as well as the brand which will in turn boost incentive for others to purchase goods from CAT INC..

Ch. 5 - Developing a Global Vision

Because CAT INC. has a great global vision, they excel in their industry (#1 in their industry). Many people think that CAT INC. only operates within the United States but the truth is they operate anywhere there are big businesses and corporations; of course with some exceptions such as North Korea or any other country outside of the general jurisdiction. CAT INC. has various firms stationed in other big countries such as China and the United Kingdom showing that their machinery is wanted and needed; they also export their goods to other countries who order through the internet. A positive note to CAT INC. would be that because their business operates all around the world they're deeply connected to various markets, domestic and international markets. On the downside because their business is spread throughout the world their source of income, marketing strategies, and other activities tend to fluctuate depending on various factors. Example; a country where one of CAT INC.'s firms are stationed has experienced economic problems and because of it big businesses and corporations would stop growing. Because of the country's economic problems CAT INC. would be negatively affected and would have to change their course of actions in order to stabilize the situation. Even though CAT INC. is affected by many factors worldwide it helps them grow as a business/company specifically through trial and error. Whenever they are faced with a problem concerning one of their firms stationed in another country they'll know what to do because they've been through it all before, maybe not in that specific country/area but they have the knowledge and experience needed in order to solve any problem.