Mike Vorster, a professor at Virginia Polytechnic Institute and State University, Blacksburg, Va., agrees. He says that dealer support and customer service is "eclipsing" brand image.
Trade-Show Secrets
None of this has stopped equipment builders from showing off, and theres no better place to watch them compete than on a big trade-show floor. Last month, at the Chicago Auto Show, the car-buying public saw the International brand name resurface for the first time since 1980. That same year, the company discontinued its popular Scout utility vehicle, which had a successful, 20-year run. It seemed that the company was gone for good as a player in the consumer market.
But this year, International Truck and Engine Corp., Warrenville, Ill., formerly known as International Harvester Co., turned heads by showcasing its new XT line of beefy work trucks, which includes the largest production pick-up truck on the planet, priced around $100,000.
Diversity More manufacturers are using retail goods and collectibles to pump up the brand. photo top courtesy of Norscot Group Inc. (Photos by Tudor Hampton for ENR) |
The razzle-dazzle was a big branding campaign. Navistar International Corp., the parent company, has only commercial dealerships. Daniel C. Ustian, chairman, president and CEO, spoke prior to the show opening, explaining how the firms objective was "building on heritage, and brand, and adding to it excitement." After deflecting rumors about bringing back the Scout, Al Saltiel, vice president of marketing, added, "We have been a lot more deliberate about being in the public image."
Next up is the triennial CONEXPO-CON/AGG show in Las Vegas this month. The event is sure to turn out some eye-catching displays as well. New products will be everywhere. However, some manufacturers have indicated that dealer service and financing programs will be a core focus at the show.
Technology suppliers have a tough job, too, because their brands are directly linked to a technical service. "Youre not just selling a product; youre selling a change of process," says Mark Forrest, worldwide sales manager for Trimble Navigation Ltd., Sunnyvale, Calif. Trimble has a joint venture agreement with Caterpillar that links Cat machines with high-tech guidance systems.
Nontraditional Venues
The public arena is the ultimate place to pump up a brand, and thats where construction equipment suppliers are headed. In 1994, a large machinery firm in Peoria, Ill., tried licensing its well-known trademark to a footwear company. Since then, more than 56 million people all over the world have slipped on a pair of Caterpillar work boots and tennis shoes. "The Caterpillar brand now transcends its products," note James R. Gregory and Jack G. Wiechmann, in Branding Across Borders (McGraw-Hill, 2002).
Cats trademark licensing program is still strong. Last year, gross retail volume of Cat-licensed merchandise exceeded $600 million, according to Ric McDaniel, the firms program manager of childrens products and collectibles. The companys monetary profit from licensing is minimal but the value lies in supporting the brand. Cat values its brand at $3.8 billion. "The way people perceive brand is changing," McDaniel says. "Those boots are walking billboards."
Some manufacturers even advertise on television, as in 2003 when Terex Corp., Westport, Conn., took out a series of spots on ESPN, showcasing its line of backhoe loaders at rock-bottom prices. Another litmus test for brand is the used marketplace. Robert Andrade, vice president of equipment management for Walsh Group, Chicago, avoids off-brand items unless he has no option. "On resale, brand matters," he says.
The Internet is a growing place where residual value meets broad public awareness. "Were always looking for more supply," says Ben Hanna, senior manager for eBay, San Jose, Calif. The sites construction category, which lists 20,000 pieces of equipment, transits and tools at any given time, serves as a well-organized database of trademark popularity. Top-selling brands last year included Bobcat, DeWalt, Case, Hilti, Topcon, Milwaukee, Ditch Witch, Vermeer and Hitachi.
Trio Granite's Thompson, Bridges and Wagy talk shop. (Photo courtesy of Granite Construction) |
William Wagy, whose philosophy is to "manage the equipment, dont let it manage you," says residual value is more of a "distant concern." Along with Dan Thompson, corporate equipment support, and John Bridges, technical services manager, Wagy runs a $700-million fleet for Granite Construction Inc., Watsonville, Calif.
Machines that can be rebuilt economically pay for themselves, he says. The team picks out units that are "not always the best you can get in every given model." But on the support side, Wagy says, "the package is worth it."
...up, no one wanted anything else but a Manitowoc," he adds. "Today, I cant tell the difference."
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