GROUP 9

CLARK MATERIAL HANDLING

GROUP-OVERSEAS: BRAZILIAN
PRODUCT STRATEGY (A)

Harini Venkateswaran 1211021

Dheeraj Kumar 1211180

Latngenhun Nongsiej 1211110
Vishnu Charan TJ 1211157
Sarang Warudkar 1211219
Aswin A 1211334

CLARK EQUIPMENT COMPANY

Large Highly Integrated Manufacturer of Capital
Goods
Major Group Includes:
1. Axles, Transmission and related products
2. MHG (Material handling group)
3. Construction machinery
4. Other Industries (such as Credit)
Clark Operations were international in scope
35% of operating Profit came from outside the
United States

MAHERIAL HANDLING GROUP(MHG)

Fork Lift Truck were major Product line of
material handling group (MHG)
Margin has improved in 1978 because of :1. Economies of Scale (Volume Increase reduce cost)
2. Operational Efficiencies improvement (Exhibit 1)
US was the strongest market, Europe was most
Competitive marketing environment, South America was
flat market
MHGs Distribution Network was good with 237 dealers
in 508 locations in 108 countries

FORK LIFT TRUCKS

Used in heavy Manufacturing and
Warehouse operations
125 numbered Model in lift truck
Differentiated Hybrid product line
HOL (Heart of the line Product):4000-6000 pound capacity trucks
which account for about 55% of sales
and build from Clark's MHG
When they start Design product line
they start with HOL product to reduct
the cost.

BRAZILIAN LIFT TRUCK MARKET

Brazil rapidly industrializing countries in SA
Growth increased at the expense of Inflation
Changes in the economic policy (Import Duty)
Impact on Clarks business as maximum products were
imported from outside
Used Friction clutch transmission which used to broke
down immediately, bad brand image of Clark and its
distributors. Improved on oil bath transmission but
image with customers undermined.
Major competitors:- Hyster, Eaton-Yale, Madal
Competition on price and Extended product line

Brazilian Market Research Questions

1. Brand Image Check: What was
Clarks brand image with
Customers ?
2. Geographic Need Difference:
Were same factors important
for Brazilian lift truck buyers as
to American Customers?

3. New product Line: Should they

introduce an automatic
transmission lift truck in Brazil?

Marketing research Company:- The

John Morton Co. Study
Marketing research Firm specialized in
developing Market-Driven Strategic plans.
Founded by Curtis Jones and Richard Johnson
Strategy Recommendations based on market
factors rather than predominantly on cost or
other internal company considerations
Use State-of -the-art mathematical and
computer modeling techniques

Marketing Research Approach: Market

Driven Strategies Steps
Identifying and defining problems
Analyze market needs, client current role and of
his competitors (Competitive Intelligence)
Formulate Practical marketing and development
strategies and designing criteria
Conduct research to determine the attitude and
opinions of buyers
Recommend Marketing strategies based on
quantitative analysis of market, based on clients
situation and short and long term goals

Market Research Solution: Factor

Analysis
Factor
1. Performance
2. Reliability
3. Durability
4. Parts Availability
5. Transmission
6. Brand
7. Selling Price

Level (Field tested)

Same, 25% increased, 25% reduced
Same Downtime, 25% more, 25%less
Same Life, 25% longer, 25% Shorter
Same, 25% better, 25% worst
Manual with friction clutch, Manual
with oil-bath clutch, Automatic
Clark, Hyster, Easton-Yale, Madal
From $15000 to $20000

Sampling methods, Questionnaire

Population Size : 750 firms
Sampled randomly
Sample framing:- Every company needed to
have used HOL product in past five years or
planning to use in next year
191 responses local Portuguese-speaking
Questions were asked on size of fleet, type of
business and percentage of lift truck
companies.

Trade-off Analysis/ Conjoint Analysis

To find out truck factors and factor levels Trade-off
analysis is done by asking questions forces the
respondent to trade-off the level of one factor to obtain
a desired level of other factor
Example :Lift truck A
Lift Truck B
Oil transmission
Automatic transmission
Present Performance
25% better performance
$17000
$17500
55 pairs were presented to each responded
These responses are translated into utilities into each
level of factor by Conjoint analysis method

THE PROBLEM
David Richards is able to understand the tabulations of the
survey responses better than simulation results. But
Implications of tabulations are obscure. David Richards has
to take decision and recommend what the HOL product
line should be-

1. The Present Model ?

2. JMCs recommended Dual Offering Strategy ?
**This decision is important because if there is any change
in product line a new research and product development
program, and new marketing program will be required.

Steps of Marketing Simulation Analysis

Utilities were found for each factor at each level
Respondents utility for any particular lift truck was
hypothesized to be the product of his utilities
This overall utility is combined with respondents price
response to get preference
The highest rating would be respondents predicted
purchase
Market share for various models could be simulated by
adding the number of respondents choosing each dividing
by total number of respondent
21 respondent were removed because their inconsistency
in answering trade off questions were unacceptable

Graphical Representations

Utility of different attribute level..

Utility of different attribute level..

Demand Function (Utility v/s Price)

Utility of Lift Truck and Consumer

Preference

Calculation of Market Share

Market Share = (Preference given by users) / *100

(Total Number of Respondents)
Example:
If No of preference for particular factor level =30
Total No of respondent = 150
Market Share = 30/150 * 100 = 20%

Project Results By JMC

Recommendation For Clark & David

Richards
Target Hysters market because Hysters was the
largest and more vulnerable to proposed Clark
improvements than Eaton-Yale
Dual Offering strategy is better (Market share is
36%), increased share 9%
Increase marketing activity generally: promotion,
advertising and selling
Maintain parts availability at present level but
promote it more
Expand the services offered by dealership

Appendix