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Citing a compounded annual growth rate of 13.5 percent in construction equipment industry sales to the rental market since 1995, as well as the powerful effects of consolidation and escalating utilization rates, Case Corp. officials emphasized to the press the critical importance of a rental strategy to the company’s business plan.
The press had come to Case’s northwoods site near Tomahawk, Wis., in September for a preview of the new Case M-series loader backhoes.
And that 13.5-percent CAGR doesn’t include skid-steer loaders, which would raise the curve a lot — they are “very hot,” said Bill Seidel, senior director – marketing. Case shipped its 100,000th skid-steer in 2000 and now commands a solid No. 2 share of the U.S. market.
“The distinction between renting and selling is becoming very blurred,” Seidel said. Therefore Case is “trying to craft solutions for
customers by drawing upon a wide range of options,” he said. Options include rentals by Case dealers, sales through dealerships to local rental companies and “key ac-counts” — large, regional rental companies — as well as direct sales by Case to about five large rental companies.
This constitutes Case’s “multi-channel” or “four-dimension strategy,” which the company believes essential in order to compete in a North American contractor market that continues to shift more and more toward rental from ownership.
The North American market for backhoes and skid-steer loaders, as well as small dozers, articulated wheel loaders and excavators, is driven largely by housing starts, which are holding steady at about 1.5 million, Case points out.
But in addition to that, non-residential construction is on the rise, and that bodes well for Case’s heavier dozers, loaders and excavators, which account for 33 percent of sales, compared to 25 percent for the lighter equipment — skid-steers, backhoes, mini- and mid-sized excavators, trenchers and telescopic handlers.
Case does 38 percent of its business in North America, 31 percent in Europe and 25 percent in Asia and the Pacific region. Case sells in 160 markets and manufactures in 16 countries, which gives the company some protection against cyclical changes and exchange rates.
Since the 1999 Case-New Holland merger that formed CNH Global, emphasis has been placed on multiple-brand management — Case, New Holland, Fiat Hitachi, Fiatallis, O&K, Linkbelt and other brands are being promoted as distinct identities so the customer base that each of these companies has developed is not shaken.
Case Construction Equipment is “seeking greater share of customer,” said Mick Stahl, senior director of marketing services, by such initiatives as broadening the product line and offering a range of financing options.
George Whitaker, director of marketing, pointed out that in the past
30 months, Case has had product introductions in wheel loaders, crawlers, excavators, telehandlers, forklifts, skid-steer loaders and directional drills — trenchless is the fastest growing construction equipment market now, Case officials say — in addition to the M-series backhoes, which are now coming on stream.
Case officials did not try to hide the fact that Case intends to get into motor graders and articulated trucks, but did not indicate when either of those moves might be.
Case Credit, with an $11 billion portfolio, is now among the top five companies in the credit industry, just behind Caterpillar and just ahead of John Deere, according to Tom Milligan, marketing manager for Case Credit. The Case credit card program has enrolled 52,000 customers, who can use the credit card for rentals from Case dealers, as well as retail.
Case claims to hold the No. 1 position in agricultural equipment and No. 3 in construction equipment, which company officials say they are determined to raise to No. 2 by the multiple-pronged attack they outlined at the Tomahawk press briefing.
That attack is led by bringing new products and technological advancements on stream, driving sales with financing enhancements and recognizing the customer’s need for multichannel choices, and then by supporting the product in the field. John Marshall, director of after-sales support, says Case can put 97 percent of repair parts on the dealer’s doorstep by 2 p.m. the day after they’re ordered, 99 percent the day after that.
Stahl says this is all about creating “the ultimate customer experience by providing solutions that drive customer satisfaction.”
That would sound like an advertising mantra but for the fact that Case commissioned a survey to find out what customers actually thought, and learned that customer satisfaction with the product had risen from 92 percent to 95 percent since 1995, but meanwhile, satisfaction with the dealer had gone from 91 percent to 96 percent. The reason for the upward shifts, explained Seidel, was that in 1995 Case began a program to monitor and develop customer satisfaction in all areas that could be considered part of that “ultimate experience” that Stahl talked about.
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