Hamilton Power Tools, under the leadership of Mr. Campagna, the marketing manager, is a sales-driven company that seeks to incorporate a customer-centric approach into their marketing tactics. With more than three decades of expertise, Hamilton Power Tools has dedicated themselves to promoting industrial products, specifically within the construction and industrial tool sectors. Their collection of offerings for the construction industry encompasses power trowels, concrete vibrators, generators, and power-driven tools.
Their primary industrial lines consisted of pneumatic tools such as drills and screwdrivers. However, they decided to differentiate themselves by acquiring a small chain-saw manufacturer. This move was motivated by their desire to expand into other markets, as the chain-saw market was experiencing rapid changes in the 1970s. Recognizing the need for expert guidance, Hamilton Tools executives sought advice to navigate this evolving industry.
Based on various sources, including trade publications, statistics from The Chain-saw Manufacturers’ Association, and his own 15 years of experience, the marketing executive believed that the chain-saw industry consisted of professionals (lumberjacks), farmers, institutions, and casual users. To gather more information, a short questionnaire was included on the warranty cards that customers returned after purchasing a Hamilton Chain-saw. The results of this “survey” indicated that the homeowner or casual user market segment was experiencing the fastest growth in the chain-saw market.
This market was made up of wood-cutters who only used the chain-saw occasionally, either for cutting firewood or trimming trees in their own yards. The sales of chain-saws started to decline in 1978 because the business was seasonal. As a result, Mr. Campagna and Ray Johnson arranged a meeting with John Hamilton to persuade him that conducting consumer research was necessary. The research was carried out by Frank Baggins of Consumer Metrics, and the presentation took place with Dale Conway, the Vice President of the research corporation present.
The research included two parts: a survey of chain-saw consumers and the implementation of the Thematic Apperception Test (TAT), which is a motivational research method proposed by Consumer Metrics of Chicago and involves using picture exhibits. The findings showed that Hamilton Chain Saws are experiencing significant growth in the market on the West Coast. The retail outlets and service distributors in this region align with the marketing strategy. To obtain a sample, Consumer Metrics used warranty cards from California men who had purchased HCS in 1977 and 1978, as these cards listed the purchasers during those years.
The purpose of the research was to examine how consumers behave when purchasing ultimate chain-saws, specifically in relation to their usage in public or private institutions. A total of 463 questionnaires were handed out, with 201 (43.4%) being returned and 18 (3.9%) undeliverable. The findings reveal that individuals aged 25 and above were the ones who purchased HCS Chain-Saw. More than two-thirds had a combined family income exceeding $18,000 per year, with over half earning more than $20,000 annually. Professionals made up 5.5% of the market, farm users accounted for 20%, renters constituted 3%, and casual users represented over 70%.
The quality was rated as good or excellent by 85% of the respondents, and satisfaction was expressed by 75%. When purchasing a chain-saw, special stores were preferred by 35%, equipment stores were chosen by 20.5%, hardware stores were visited by 9.5%, farm stores were opted for by 7%, and sports stores were chosen by 5%. The research also revealed that only 32% of respondents had complete familiarity with chain-saws, while 44% claimed to have some familiarity, 19.5% stated they were unfamiliar, and 63.5% had no knowledge at all. Furthermore, only 20% of all respondents planned to purchase Hamilton Chain-Saws.
According to a survey, 45% of chain-saw purchases were influenced by salesperson recommendations, emphasizing the important role dealers have in marketing. However, it is worth noting that other factors also contribute to purchase decisions. About 26.5% of respondents said the dealer had no influence, while 16% mentioned some influence and 6.5% noted minimal influence from the dealer. Moreover, more than one-third of respondents did not interact with the dealer or dealer salespersons during their initial visit to the dealership. Only 21% witnessed a chain-saw demonstration and just 28.5% learned about the appropriate chain-saw model for their needs. Overall, it seems that most customers had passive buying experiences when first visiting a chain-saw salesperson, relying more on interactions with salespeople rather than visual assessments of products. As a result, if their preferred dealer does not have the desired chain-saw in stock, customers may need to visit another store.
QUESTION – ANSWERS
a) Why did Hamilton Power Tools wait so long before conducting and utilizing consumer research? What is your opinion on the usefulness of market research for managers?
Mr. John Hamilton, a successful entrepreneur with an ego, trusted his own instincts and believed he understood his market. He was convinced that his chain-saw sales had been strong for the past ten years. However, in the 1970s, the chain-saw market started to evolve rapidly, prompting his executives to recognize the need for expert guidance. During a meeting in March 1978, when the chain saw market showed signs of slowing due to its seasonal nature, Mr. Campagna and Ray Johnson convinced John Hamilton that conducting consumer research was essential.
According to the group, marketing research plays a vital role in managerial decision-making by helping to reduce uncertainty in the face of fierce competition and a changing environment. Additionally, the group evaluates the sampling frame used by Consumer Metrics and expresses discomfort with their research methodology. Consumer Metrics used warranty cards from purchasers during 1977 and 1978 as their sampling frame, which is not representative of the entire population. The survey results indicate that 63.5% of these individuals had no knowledge of the chain-saw, suggesting that the research was not systematic. The research findings lack information regarding the remaining 214 questionnaires, such as whether they were emailed, left at doorsteps, or conducted via telephone conversation.
Consumer Metrics should have taken into account salespersons, owners, and other members of the public. They should have focused on the existing data they had collected. Consumer Metrics should have engaged with the general public to obtain a clearer understanding of the market. They could have accomplished this through telephone conversations. C) Based on the information provided in the case, develop a marketing plan. In your group’s opinion, what is a marketing plan? What notable insights does this research provide that may impact planned marketing – mix variables and the marketer’s understanding of the target market?
Steps involved in a marketing plan:
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Begin by providing a comprehensive description of your business and product line, emphasizing the key features. It is essential to mention if the product is still in development or ready for launch. Hamilton Power Tools Corporation has an extensive experience in marketing industrial products, particularly serving the construction and industrial tool markets for more than 30 years.
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Identify your target market.
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Establish a budget.
The company has a product line that includes power trowels, concrete vibrators, generators, and power driven tools. They also have an industrial line which features pneumatic tools such as drills and screw drivers. In 1949, they introduced the Gasoline Powered Chain – Saw as a way to expand into new markets. Market research conducted by Mr. Campagna, who has 15 years of experience in the chain-saw industry, identified professionals (lumber jacks), farmers, institutions, and casual users (home or estate owners) as the main target markets for this product. A survey conducted by the marketing executive at Hamilton Power Tools Corp. found that the homeowner or casual user market, referred to as “weekend wood-cutters,” was the fastest growing segment.
Chicago’s Consumer Metrics were contracted by Hamilton to oversee two market research endeavors: a survey of consumers who purchased chain saws and a Thematic Apperception Test (TAT). According to Consumer Metrics, the West Coast is experiencing rapid market growth for Hamilton Chain Saws. As a result, men from California who bought HCS chain saws in 1977 and 1978 were chosen as the ideal sample group. The warranty cards served as the sampling frame, with institutional name cards being disregarded since the focus was on the behavior of individual chain saw consumers rather than their use in public or private institutions.
According to the group, Consumer Metrics made a mistake by excluding cards with institutional names. They should have included all the cards and, furthermore, could have distributed questionnaires to shop owners to have them filled out by their customers. By solely relying on warranty card surveys, they fail to capture the entire market of California or the West Coast. A true representation of the population requires considering both warranty card surveys and conducting interviews with shop owners, salespersons, and customers.
Focus Group Discussions and Expertise Group Discussions would be included. The cost of the product and research budget are not mentioned in the case. The group conducted research on customer perception of product pricing and satisfaction with pricing strategy. After analyzing Hamilton Power Tools Corporation, the strengths are high market share in industrial, professional, and product technology.
The weaknesses of the current marketing plan include a lack of preparation for changing market trends and insufficient information on the casual user market. The group defines a Marketing Plan as the combination of marketing mix, marketing strategy, and details related to time and cost. The conducted research provides important information such as quality assessments, retail outlets that carry Hamilton Chain-Saws, dealer visitation frequency, number of different dealers visited, length of time respondents considered purchasing a chain saw, familiarity with chain saws among respondents, specific brand names mentioned during initial visits, brand preference for chain saws, and the influence of dealers or salespeople. According to the research findings, 85% rated Hamilton Chain-Saws as good or excellent while 75% rated them satisfactory. Specialty stores accounted for 35% of purchases made by respondents followed by equipment stores at 20.5%, hardware stores at 9%, farm stores at 7%, and sports stores at 5%. More than 60% of respondents visited two or more stores while 32% were familiar with chain-saws and another 44% were somewhat familiar. Additionally,19.5% were unfamiliar with chain-saws and an overwhelming majority (63.5%) had no knowledge about them whatsoever. Only one-fifth (20%) of respondents initially planned to purchase Hamilton Chain-Saws while half had another brand name in mind but ultimately changed their decision with30% intending to buy a Hamilton Chain-Saw instead.
The study found that 45% of participants relied on dealer/salesperson recommendations when making their decision. Additionally, 6.5% were not influenced much, while 21.5% saw a chainsaw demonstration and 28.5% learned about the correct model. These findings provide valuable insights for the marketing mix. The group believes that additional information is necessary before presenting a comprehensive marketing plan to Hamilton’s management. This information includes understanding customer preferences and behaviors, analyzing competitors, determining pricing strategies, identifying distribution channels, planning advertising and promotion tactics, and conducting market research on the casual user segment.
In the questionnaire, the element of “Price” was not mentioned. Price is a crucial factor that influences customers’ purchasing decisions. It would have been beneficial for Customer Metrics to include a question addressing respondents’ satisfaction with the pricing strategy of the Hamilton Chain-Saw. The research should accurately represent the population, but in this case, the population was not accurately represented. The data is biased because the researcher only focused on researching within the customer base of those who purchased the chain-saw in 1977 and 1978, which was advantageous for him.
Regarding recommendations for research and demand forecasting for Hamilton Power Tools, the research conducted by Consumer Metrics was generally well-performed but had some drawbacks and flaws in its strategy. Specifically, the researcher did not involve Focus Group Discussions or questionnaires for salespersons and store owners. Additionally, the sample size and sample frame used were incorrect based on the target market, and therefore not representative of the population. Furthermore, there is no information provided about the remaining 214 questionnaires. The focus was solely on customers who purchased questionnaires in 1977 and 1978, neglecting others.
To ensure the accuracy of data collected from warranty card survey forms, it is crucial for researchers to conduct interviews with salespeople. These interviews aim to establish the percentage or proportion of customers who buy chain-saws on a daily basis at the store. Moreover, researchers need to ascertain how many of these customers specifically purchase Hamilton Chain-Saws and whether they return the warranty card survey sheet. Obtaining this information will enable them to assess the representativeness and relevance of the selected sample frame and its capacity to yield meaningful findings. Additionally, this case emphasizes the significance of market research by highlighting how qualitative research helps in comprehending the underlying reasons behind particular phenomena.
Qualitative research is the collection and analysis of data to gain a deeper understanding of situations, emphasizing the importance of representative research. This case highlights the significance of market research, specifically qualitative research, in understanding causation. It showcases the process of conducting qualitative research through data collection and analysis.
According to the research conducted by Hamilton Power Tools Corporation, they discovered that the homeowner or casual user market segment experienced the highest growth in the chain-saw market. This specific market consists of individuals who, on occasion, use a chain-saw to cut firewood or prune trees in their backyard. This case demonstrates the value of qualitative research in gaining a comprehensive understanding of a situation. It also highlights the importance of ensuring that a research study accurately represents the population being studied. The researcher distributed a total of 463 questionnaires, with 201 being returned and 18 not delivered. However, details regarding the remaining 214 questionnaires and the research method employed were not provided. It is crucial that the data gathered is unbiased.
