Price
The second variable, Price involves determining the pricing decisions and strategies such as “pricing, suggested retail price, volume discounts and wholesale pricing, cash and early payment discounts, seasonal pricing, bundling, price flexibility and price discrimination” (NetMBA, 2007). Organization should price its product or service at a rate that will allow them to remain competitive, but allows for a good profit margin is crucial for any organization. Pricing differentiates the organization’s products or services from competitors.
Place
The third variable, Place or distribution, is where the business sells products or services and distribution is how a product will be delivered to a customer. The product or service reaches its target market through distribution channels, which are any series of firms or individuals who participate in the flow of products or services from the producer to the consumer. Organizations have different methods of getting a product or service to the customer and knowing whether the customer wants to see or touch the product before he or she commits to purchasing the product is important. Price is also used to differentiate the product or service from competitors
Promotion
The fourth and final variable is Promotion. Promotion is the methods used to communicate benefits and features of the product or service to the targeted customer base. The promotion component involves telling the targeted customers in the channel of distribution about the "right" product. Promotion includes, “advertising, sales promotion, publicity, personal selling, branding, and refers to the various methods of promoting the product, brand, or company” (Wikipedia-Marketing, 2009, ¶4). In some instances, promotion focuses on acquiring new customers, while in other instances promotion is focused on retaining customers.
Caterpillar Inc. and the Marketing Mix
According to Caterpillar’s worldwide website, “Caterpillar is forever setting higher standards by maintaining a watchful eye on the ever-changing shift in regional dynamics and responding with new product innovations and manufacturing flexibility” (Cat.com, 2009, ¶1).
Product
Caterpillar’s considers its marketing strategy as a critical success factor. “In offering best value in the market, the company doesn’t mean top-of-the-line products for every customer. Instead it provides for each customer the right product” (Goryunov, 2003, ¶3). Caterpillar’s products are constantly setting industry standards with its product line that consists of more than 300 machines. Caterpillar employ’s some of the country’s top engineers that provide “deep industry insight and cutting-edge technologies” (Cat.com, 2009, ¶1). Caterpillar listens to its customers and focuses on their specific needs. Caterpillar’s targeted industries include mining and construction, marine and forestry. Caterpillar is continually building innovative products for their specific industry which is gives Caterpillar the ability to provide “industry standard productivity, efficiency, cost-effectiveness and environmental responsibility” (Cat.com, 2009, ¶2). Caterpillar customer-focused approach
“embraces the company’s expertise of the problem, choice of relevant new or used machinery and equipment, a customized offer of a deal (sale, rental or subcontracting options) and appropriate financial options. This approach also covers training of a customer’s employees, after-sale repair and maintenance service, and supplies of spare parts” (Goryunov, 2003, ¶3).
Price
As the world leader in the heavy equipment industry with limited competitors, Caterpillar charges premium prices for its high-quality products. Caterpillar’s vision is centered on making its customers stronger and more successful by continuing to earn their trust and loyalty ultimately securing a more profitable future for all who know and value the Caterpillar brand (Cat.com, 2009). Caterpillar provides customers with the option of “build & price your machine” through its website. This innovative option allows its customers “the ability to shop 24 hours a day, seven days a week” (Cat.com, 2009, ¶2). Caterpillar’s website also allows the customers to compare equipment and find work tool attachments.
Place
Caterpillar has been in business for more than 80 years and it has been building the world’s infrastructure and “has helped drive positive and sustainable change on every continent” (Cat.com, 2009 ¶3). Caterpillar has expanded globally with “hundreds of locations worldwide that serve and support its customer base and respond quickly” (Cat.com, ¶2). Caterpillar dealers are continuously researching market opportunities that help them develop business contacts with potential customers who will allow the dealer to show the customers i) new products in action, ii) orders processed to fulfillment and iii) timely delivery of the order products direct from the factory (Goryunov, 2003).
Promotion
Caterpillar products are promoted through its global dealership network which is made up of “65 dealers in the United States and 127 outside the United States, serving customers in nearly 200 countries. Almost all are locally-owned, independent businesses” (Head, 1997, ¶7). Caterpillar’s relationships run deep with its dealers with the average dealer having been on board for more than 50 years. Caterpillar takes its brand very seriously and defends its infringement rights with vengeance. For those loyal customers, Caterpillar offers official Caterpillar licensed products that include apparel, toys and accessories through its official Cat Stores. Caterpillar also participates in ‘trade shows’ throughout the world, which allows potential customers to see, touch and feel Caterpillar products.
Conclusion
In conclusion, an organization’s marketing strategy should include a model that is crafted to implement its marketing strategies. The marketing strategy should include ‘mixing’ or ‘blending’ of various components, including the 4 P’s, in a way that both organizational and consumer (target markets) objectives are met. The goal of the marketing mix provides managers with decision making tools that are centered on the 4 P’s in order to generate perceived customer value and generate a positive customer response.
References
Cat.com. (2009). About Cat. Retrieved January 19, 2009, from http://www.cat.com/cda/layout?m=37406&x=7
Goryunov, Felix. (June, 2003). Critical Success Factors: Caterpillar Inc. Expands in the USSR. Diplomat Magazine. Retrieved January 19, 2009, from http://www.usrccne.org/news2.phtml?m=140
Head, Keith. (29 April, 1997). Real World Strategies are Usually Blends of the Primary Stategies. Retrieved from http://strategy.sauder.ubc.ca/head/Lectures/mne4.html
Lake, Laura, (2009). Developing Your Marketing Mix. About.com: Marketing. Retrieved January 18, 2009, from
Netmba.com. (2007). Marketing Mix (The 4 P’s of Marketing). Retrieved January 19, 2009, from http://www.netmba.com/marketing/mix/
Wikipedia.com. (2009). Marketing. Retrieved January 18, 2009, from
