Title Page Module: Title: Student ID: CE00317-2 Management & Planning Marketing Strategy of JC Bamford Excavators Ltd

01911525 EAT01205818 Date: For the attention of: 7th January 2004 Geoff Leese - Staffordshire University - Stoke-on-Trent College

Index Index...............................................................................................................................2 Abstract..........................................................................................................................3 The JCB Brand ............................................................................................................3 Early Innovation & Marketing.........................................................................................3 Marketing Mix ................................................................................................................4 Product - Quality.........................................................................................................4 Product - Range..........................................................................................................4 Product Brand..........................................................................................................5 Product Service.......................................................................................................5 Price Value..............................................................................................................6 Promotion Public relations.......................................................................................6 Promotion Exhibitions..............................................................................................7 Place Locations.......................................................................................................7 Place - Transport........................................................................................................7 Market Segmentation.....................................................................................................8 References.....................................................................................................................8 Bibliography....................................................................................................................8

Abstract Research & analysis has been carried out on the marketing strategies of JC Bamford Excavators Ltd, in how it takes its products to markets across the world. The report covers how the companies marketing mix has changed over time, and how it differentiates its products in the different markets segments that it operates.

The JCB Brand Joseph Cyril Bamford founded JC Bamford Excavators Ltd in 1945, where at the time the company was run from a 12 x 15 ft garage in Uttoxeter, Staffordshire. The company now has factories globally employing thousands, yet despite the enormous growth of the company, it remains privately owned by the Bamford family, making it one of the largest privately owned family businesses in the world. JC Bamford Excavators Ltd is commonly known as JCB, which are the initials of its founder Joseph Cyril Bamford. These three letters provided the company with the basis for a simplistic logo that has always remained the same, with the very first product to bear the logo being the backhoe loader in 1953. The JCB brand is so strong that the acronym JCB is often used when referring to diggers, just as vacuum cleaners are often referred to as hoovers. JCB also has an entry in the Oxford English Dictionary: JCB noun Brit. trademark a type of mechanical excavator with a shovel at the front and a digging arm at the rear. ORIGIN the initials of J. C. Bamford, the makers. (www.AskOxford.com)

Early Innovation & Marketing The founder of JCB is said to have been a brilliant marketeer, lead by innovation, which is evident by looking at how the company began. JCB started by producing a core product of tipping trailers, and after three years started to focus on hydraulics in producing Europes first hydraulic tipping trailer. Innovation then lead JCB into producing mechanical arms powered by hydraulics that were attached to tractors as tools, and by 1953 what started off as a tool had been developed into its own fully functional machine no longer dependent on the chassis of a tractor. Now that JCB

had a strong formal product branded with the JCB logo, Joseph added a novel feature to the new 3C model that was launched in 1964. The 3C backhoe loader come with the facility of being able to boil a kettle inside the cab, and every 3C ordered would also be supplied with a JCB kettle delivered in person by Joseph Bamford - from this point on no longer did JCB sell just a core/formal product, but now a augmented product with additional benefits to rival its competitors. This innovation and marketing excellence has followed through to the present day, by means of diversifying into new markets, increasing brand loyalty, creating supporting services to its main business and focusing on customer requirements.

Marketing Mix As an established company, JCB have a strong marketing mix that has helped to promote them to where they are today. JCBs marketing mix is made from a combination of a good range of quality products, fair pricing, good promotion and vast product placement; each area comprising of one or more sub-elements, that may overlap into another section of the mix. Product - Quality To see JCBs ability in producing good quality products, clients need only look at their history and achievements - JCB are the largest manufacture of backhoe loaders in Europe which has been in manufacture for over 51 years, which in itself is testament to the quality and success of their product. Also focusing on JCBs attitude towards quality rather than quantity is their website which states they do not aim to be the largest manufacturer of commercial/industrial, agricultural and material handling equipment, but the best. Marketing in this way by aiming to be the best would influent prospective clients, helping to increase sales and therefore increase the size of the company. Advertising an aim of wanting to be the largest manufacture would have no impact on sales, as this aim would be an achievement of the company, and not perceived as any benefit to prospective clients. Product - Range Another element of the marketing mix is the product range. After developing a best seller, the 3C backhoe loader, JCB knew it would need more than one successful product to sustain its growth, and so JCBs product range has grown from just one to between nine and thirteen product types, with130 to 160 different models. This is an indication of how committed JCB are to new development, which has lead to the wide

depth of products we now see today. So not only do JCB promote quality, but have a good range of products for clients to choose from. This also shows how forward looking the company is, by looking for gaps in the market place and listening to what customers need. JCB have recently announced in a network newsletter that plans have begun to produce their own diesel engines at a 160,000 sq ft plant in Derbyshire, UK another development in the JCB range (http://www.jcb.com/newsletter/newsletter1.pdf - retrieved January 2004). Product Brand As mentioned earlier, JCB have a strong brand name that is recognised globally, and being a well-established company gives JCB an advantage. This brand will give prospective clients confidence in the product, and could make the difference in a prospective client choosing a JCB over a competitors. A strong brand identity has immeasurable value to a company, as it is not an asset that can be brought or sold, and building a strong brand takes time and hard work. To build and make use of the strong JCB brand, the company have diversified into a number of markets, including: Insurance Training Finance Organic Food Clothing Toys DIY Tools

Product Service To aid clients in purchasing and running JCB products, JCB have setup other companies to support their main business. One support company, JCB Finance Ltd, provides finance for the purchase of new JCBs. Another support company, JCB Insurance Ltd, provides insurance policies catered to the type of businesses likely to use JCB equipment, such as rental or construction companies. Another company, JCB Training Ltd, provides training on the operation of JCB machinery. Although these companies were setup to support JCBs main business activities, they also function independently, for example JCB Finance Ltd will provide finance to companies in general, providing the funds are not used to buy products in competition to JCB. JCB Insurance Ltd also provides insurance to the public, motor

insurance for example. These companies are also an example of how JCB have diversified into finance, insurance and training markets. Price Value For a product to sell it must be priced competitively, but with the strength of the pound being so high in some countries this can sometimes prove difficult. In order for JCB to be competitive while at the same time remaining profitable, JCB have invested in manufacturing and assembly plants abroad. This enables JCB to source parts in local countries at local prices and removes restrictions that may normally be in place by import/export regulations. This is one reason why JCB opened a new manufacturing plant in Georgia USA in 2000, to enable them to take a bigger share of the US market.

Promotion Public relations JCB work hard on their public relations and do a number of things to constantly improve their image with the public. JCB landscape and conserve many acres of land at their World and US Head Quarters helping the all types of wildlife and making the company very environmentally friendly.

JCB have recently donated space to the US Air force museum at their US head quarters, which will attract a lot of visitors to the vicinity of the JCB plant. In the past four years JCB have donated at least: o o o o o 50,000 to the NSPCC. 12,000 to comic relief A 35,000 3CX backhoe loader to an Elephant Sanctuary in Sri Lanka. In 2002 diverted delivery of a 22 ton excavator to help repair flood defences following major flooding in the Czech Republic. In 2001 loaned a 35,000 3CX to clear more than 1,000 tonnes of waste in Bellingshausen, and trained five volunteer operators at facilities in Derbyshire.

JCB are donating 1,000,000 worth of equipment to aid the clear up operation in Asia following the tsunami disaster. This equipment is being supplied by JCB India and other dealers in the affected regions.

Promotion Exhibitions In the early days Joseph Bamford would demonstrate the agility of their backhoe loader by making it perform at exhibitions to astonished crowds, these shows are now performed by a team of backhoe loaders and operators, who are now known as the Dancing Diggers. The dancing diggers performed at Desert Inn in Las Vegas in 1999 where their performance was broadcast live on local television. Due to the high interest, they performed again in Las Vegas at Conexpo 2002, a Construction Exhibition, where they performed on stage every hour. Place Locations With JCB having manufacturing plants on four continents and 542 registered dealers with 930 locations worldwide, JCB is able to sell its products to over 150 countries. JCB registered dealers can be supported by JCB sales that are located in the UK, Australia, Belgium, Brazil, France, Germany, India, Italy, Netherlands, Spain & USA. Due to the extent of JCB's distribution network, the company is able to spread the risk of economic downturn in any one country, and by having manufacturing plants on different continents allows JCB to compete better in target markets where the pound is high, which lead to the development of JCB's manufacturing plant in Georgia, USA opening in 2000. This $100,000 investment was due to JCB's desire to take a greater share in the large US market. In my opinion it is not JCB's intension to move manufacturing abroad as JCB currently export 70% of its UK production, furthermore JCB's plants abroad are mainly for the production of their core product the backhoe loader, rather than their entire range. It is for these reasons I believe JCB will only manufacture within local markets when they see a need to increase their share in such markets, such as USA, as manufacturing locally allows JCB to be more competitive by sourcing parts at local prices and evading duty and import restrictions. Setting up manufacturing plants abroad is also expensive, so JCB are only likely to do if they see a long term return on their investment in a particular market. The current target markets are USA, Europe & the developing world. Place - Transport Due to the size and weight of JCBs machinery, Joseph Bamford found it difficult to transport their equipment for demonstrations to prospective buyers across the UK 7

and Europe. For this reason JCB brought a company jet & helicopter, branded with the company logo, so that prospective clients could be flown to and from JCBs World Head Quarters is the shortest possible time.

Market Segmentation JCB target three market segments, they are agricultural, commercial/industrial & ground care. JCB target a combination of their 9 to 13 product groups to each of the three segments, of which some products overlap, with ground care having the smallest number of product groups. This is because the requirements of ground care companies are not as large as those of agricultural & commercial businesses; they do not have a requirement for large excavating equipment.

References AskOxford.com, Retrieved Jan 2005, from: http://www.askoxford.com/results/? view=dict&field12668446=jcb&branch=13842570&textsearchtype=exact&sortorder=score%2Cname JCB, 2005, Network Newsletter, retrieved Jan 2005 from: http://www.jcb.com/newsletter/newletter1.pdf

Bibliography

JCB, 2005, Construction, Agricultural and Materials Handling Equipment, http://www.jcb.com Off-Highway Research, August 2004, Company Profile JCB. http://www.offhighway.co.uk/samples/jcb.pdf