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Essay Subject:
Discusses the manufacturing and marketing, full-service firm specializing in hydraulic equipment.... More...
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7 Pages / 1575 Words
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Paper Abstract:
Discusses the manufacturing and marketing, full-service firm specializing in hydraulic equipment. Examines the expertise and resources a JCB retail dealer needs. Shortage of trained and skilled technicians. Issue of ongoing profitability. Markets. Impact of the retail market and rental chains. Customer service. Importance of communication skills and a proactive sales force.
Paper Introduction:
Managing for the Future at JCB
JCB, a company created over 50 years ago by Joseph Cyril Bamford, is a manufacturing and marketing firm that specializes in the development and production of hydraulic excavators, materials handlers, wheel loaders, mini-excavators, skid steer and high speed agricultural tractors (About us, 2001). In addition to sales of new and used equipment, JCB also offers its customers service via its franchised and company-owned dealerships, parts replacement, a range of attachments, and financing via leasing, lease purchases with or without options, installment sales contracts, and rentals (The best back-up…, 2001). In brief, JCB is a full service firm with a carefully defined and expanding niche market for state-of-the-art hydraulic equipment.
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(1998). Another issue that JCB and other heavy equipment dealership managersmust face is ensuring ongoing profitability. JCB is a forward-looking firm that has diversified andwhich is aggressively pursuing new joint ventures and alliances with otherfirms, including CIT Equipment Financing, as well as entering into newmarkets overseas (JCB and CIT..., 2 1). Once the equipment reaches a predetermined agepoint, it is sold as used and replaced with new equipment. He orshe will recognize the importance of positioning customers as part of thevalue-added chain, and will seek out customer input and participation. Agency Sales Magazine (Building thebusiness..., 1998) commented that traditional definitions and components ofcustomer service are being replaced by the idea that customers arethemselves a source of value beyond their purchasing behaviors. (2 1). Bares (1999)believes that customer training for the management of new "smart machines"will be an imperative in the future - and for JCB dealer-managers, whoseproducts are often highly sophisticated and technologically advanced, thisis an important consideration. Given the aforementioned high capital cost of the kind ofequipment produced and distributed by JCB, offering a variety of purchaseor rental/lease options is more and more critical. Managing for the Future at JCB JCB, a company created over 5 years ago by Joseph Cyril Bamford, isa manufacturing and marketing firm that specializes in the development andproduction of hydraulic excavators, materials handlers, wheel loaders, mini-excavators, skid steer and high speed agricultural tractors (About us,2 1). Rental firms recognize that they are in acapital equipment business and thus do not have extensive periods of downtime on their equipment. Dealers must becomeexpert practitioners of the art of communicating; customers must be able toaccess the dealer, understand what the products are about, and becomfortable with the service and responses they receive. From the technical standpoint, the role of the JCB dealer goes wellbeyond recruiting and retaining good service technicians. This equipmentwill further require that part of the sales package be customer training -repositioning the JCB dealership as a source of educational and trainingsupport for its customers and not solely as a sales locus. The purpose of this report is to determine what expertise andresources a JCB dealer requires at the present time, and to forecastemerging dealership management and marketing requirements over the courseof the next decade. Similarly,providing salespeople with what they need to get the job done is a majortask for the dealer-manager. Part of the responsibility faced by the JCB dealer will be to developand retain a trained, proactive sales force. Bares, J. (2 1). This is also necessaryto compete effectively with the rental chains that are beginning to cutinto the sales of heavy industrial and agricultural or manufacturingequipment (Landers, 1998). Landers, K. Sales agents mustunderstand that part of their job is to help customers grow their ownbusinesses. Continuity in the marketplacewould appear to be a key ingredient in company growth and sustainedprofitability (Building the business..., 1998). The firm, which initiallyfunctioned almost exclusively as a manufacturer, began about 25 years agoto establish a network of dealerships for direct retail sales of itsproducts; dealers in such settings must, consequently, possess in-depthknowledge of the JCB product lines, service systems, finance options, andmarketing strategies. A recent report in Pit & Quarry (John Deereprogram..., 2 1) highlighted the need for 25, new technicians capableof servicing construction and other heavy equipment over the next fiveyears. JCB, at its dedicated corporate Web site (Finance to own,2 1), lists the various financing options that it has created for itscustomers. JCB, like John Deere, wouldbe well advised to make training programs available to potentialtechnicians; for dealership managers, this may well be the number one humanresources challenge of the next decade. Clients can finance to own the equipment they need, rent, leaseor lease-purchase equipment, and convert rental agreements to purchaseagreements. (2 1). As Landers(1998) suggests, the leading edge rental firms offer a compelling exampleof how to run an equipment-intensive business. Available at www.jcbna.Com/finance/usd/finance_index_ngw.htm. Pit & Quarry, 93(1 ), 79. Given that heavy equipment is the mostcapital intensive investment made by construction and other firms(including agricultural producers and manufacturers who use hydraulics-based products such as conveyor belts and fork lifts, as well as loadingdocks), JCB dealers will be presented by JCB itself with new equipmentengineered to assist customers in realizing cost savings. (1998). References About us. Dealers, in contrast, often find that they areoverstocked with costly equipment and are losing out to rental firms. JCB, as a producer and distributor of heavy equipment, must becomemore and more sensitive to changing market conditions and equipment needs.The successful JCB dealer-manager will possess the traditional skillsassociated with effective management - communication and human resourcesskills, a customer service orientation, knowledge of products and services,etc. Taken as a whole, these are thetraits that any successful manager will need for continued success in thecoming decade. The best back-up in the business. (1999). Coming next decade: More machine automation.Construction Equipment, 1 (2), 88 - 92. (2 1). Finally, JCB dealer-managers must become more and more conversantwith the various financing options that the parent firm is making availableto its customers. Construction Equipment,98 (4), 9 - 1 . In addition to sales of new and used equipment, JCB also offers itscustomers service via its franchised and company-owned dealerships, partsreplacement, a range of attachments, and financing via leasing, leasepurchases with or without options, installment sales contracts, and rentals(The best back-up..., 2 1). Available at www.jcbna.com/corp_infor/ccrp_index.htm. Fielding a well-trained and prepared salesforce is critical in maintaining a competitive edge, particularly in lightof the emergence of the chain rental firms. The driving force for automationis, of course, cost reductions. Communication skills are therefore a key skill set that the JCBmanager will require (Building the business..., 1998). Selling short. Most significantly, however, JCB dealers and other equipment salesfirms are increasingly challenged by a growing shortage of trained andskilled technicians. While the financial services offered by JCB are company-wide,and not limited to individual dealerships, the effective dealer-managerwill be able to work with customers to ensure that an optimum financialplan is in place. Finance to own equipment. It is possible that the dealer of the future will slowly come to theconclusion that a major focus of his or her business and marketing activityshould be upon rental rather than sales of JCB products. - along with knowledge and abilities specific to the industry. Agency SalesMagazine, 28 (9), 32 - 36. Consequently, the JCB dealer (and the parent company) mustoffer salespeople ongoing training and education, particularly as newproduct lines are introduced and new service programs offered. John Deere program focuses on the future. Thisgives large rental fleets a financial head start on each machine that makesprofit almost certain. JCB and CIT Equipment Financing. Thisindividual will aggressively recruit and train skilled technicians forservice programs, and will carefully scrutinize market conditions in thetarget markets the dealership serves. Thus, the JCB dealer may need to expand service toinclude rentals, maintaining a paid-for fleet of the most importantequipment (in terms of local market demand, measured by careful marketanalysis and research) and competing head-to-head with larger chain andlocal rental firms (Landers, 1998). Construction Equipment, 1 3(3), 18. Kirk Landers (1998) reportedthat marketers of heavy equipment of the type produced by JCB are beingchallenged by firms that specialize in rentals of such equipment. Landers (1998)also suggests that dealers must realize that one of their own biggestcustomers in the future is likely to be the rental market - and today, manyvolume-hungry manufacturers (including, perhaps, JCB) are selling directlyto the rental chains at prices lower than their distributors pay. John Bares (1999)has suggested that the next decade will be characterized be greater levelsof machine automation, necessitating dealer-manager knowledge enhancementin order to ensure that potential customers will also receive the kind ofmachine-specific training that they need. Building the business back home. Their markets determine thecontents of their fleets - rather than the reverse, which tends tocharacterize deal operations. (2 1). Thesefirms buy equipment directly from companies like JCB (often at deepdiscounts), and then keep the equipment for a period of two to three years(the period regarded as least likely to result in service problems orperformance deficits). Available at www.Jcbna.com/products/index.htm. Recruiting and training good service technicians, according to MickSims, manager of customer support and marketing development of rival firmJohn Deere, will be vitally important (John Deere program..., 2 1).Currently there is an across-the-board shortage of good, trainedtechnicians and skilled techs are being enticed to stay with their currentemployer with compensation package increases. Thelearning organization and the successful competitor in this and othermanufacturing segments will need to incorporate customers into the entirevalue-added chain, securing customer input on product design and pricing,and also making the purchase and service experience positive for thecustomer. Thus, dealers mustthoroughly understand their lines and keep customers updated as to newdevelopments and products. Another area in which the JCB dealer-manager of the future willrequire expertise is customer service. Thus,the JCB manager of the future will need to convert some of the businessfocus from sales to rentals in order to compete against the rental firms. In brief, JCB is a full service firm with acarefully defined and expanding niche market for state-of-the-art hydraulicequipment.
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