Analysis of sales, profits, and market shareCaterpillar sold over 50 percent of its product in overseas countries. Caterpillar realized that there is an opportunity and the company continued focus outside of the U.S., particularly the developing countries. Because of economic conditions in the developing countries customers are not able to pay hard currency for the product. Caterpillar projected that sales will increase in these areas in the future and came up with any possible way of gaining customers in the developing areas.In 1988 Caterpillar Inc. made record sales of over $10 billion dollars and realizes a profit of $616 million. But although the company sales continue to incre ...view middle of the document...
Also, Caterpillar portfolio includes a non-tangible product by providing financial assistance to its customers. Customers are willing to pay a premium price for Caterpillar's product because they build the biggest and best equipment in the world.They machinery was technology superior and can be easily identifies through its goal- and-black distinctive color feature which stood out from its competitors green and black.Large heavy weight equipment has a very long lifecycle, which cause this particular product market to become saturated and curtail future growth. Therefore, Caterpillar introduced new products to its line tailored to fit lightweight users such as contractors who do not need the massive equipment. The company aimed to fill this segment by producing multipurpose product to the owner/operator or small contractors. As the company strives to serve all the niches in the different segments its product mix become broader and deeper. The product mix is obviously broad because Caterpillar has different product line to serve the different industry. There are also an adequate average number of products in each line for it to be considered as deep product mix.Place/distributionCaterpillar distribution system includes a global dealer network. The Caterpillar dealer network handled all sales and services worldwide except some direct sales. The 215 independent dealers network handle operating, sales, parts, and services in more that 170 countries around the world. This strong dealer network gave Caterpillar a competitive advantage and was the driving force for the company when it responded against Komatsu's entrance into the US market. Industrial equipment tend to breakdown often which cause the customers to spent up to three time the cost on the actual equipment on spare parts alone, over the long life of the product. Therefore, Caterpillars began to focused on provide quality service to its customers by providing after-sale service and customer responsiveness to equipment failure. This customer focus strategy was very profitable for Caterpillar because the customers feel a sense of purpose and become loyal to the company.Caterpillar introduces a communication and inventory control system to support its dealers. These allow the company to make more accur...
