hamilton case solution

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SUMMARY Hamilton Power Tools with Mr Campagna, the marketing manager for Hamilton Tools is a sales oriented company and wanted to adopt consumer oriented philosophy of the marketing concept. For more than 30 years, Hamilton Power Tools had been marketing industrial products by catering to the construction and industrial tool markets. Their construction product lines included tools such as power trowels, concrete vibrators, generators, and power driven tools. Their industrial lines were primarily pneumatic tools: drills, screw drivers etc. One of their products, the gasoline powered chain saw , was somewhat different from the traditional construction and industrial tools. It had the opportunity to acquire a small chain-saw manufacturer. The main reason behind this was to diversify the company into other markets. The chain-saw market was changing rapidly during 1970, and Hamilton Tools executives realise that they needed some expert advice. Reports from trade publications, statistics from The Chainsaw Manufacturers¶ Association, and his personal experience of 15 years made him believe that the state of the chain-saw industry was composed of professionals (lumber jacks), farmers, institutions, and casual users. The marketing executive had a short questionnaire on the warranty cards that purchasers returned after buying a Hamilton Chain-saw. According to the warranty card ³survey´, the fastest growth in the chain-saw market was in the homeowner or the casual user market segment. This market consisted of the wood-cutters who used the chain-saw once or twice a year to cut firewood firewood or o r to prune trees in the backyard. Chain-saw sales began to slow down because of the seasonal nature of the business in 1978 due to which Mr Campagna and Ray Johnson had a meeting with John Hamilton and was able to convince the executive execut ive that some consumer research was necessary.

Group  1, Case  1 (Hamilton Power Tools Corp.)

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The research was conducted by Consumer Metrics , by Frank Baggins and the presentation was given in the presence of Dale Conway, Vice President of the research corporation. The research was done in two parts:-

y

Survey

of Chain ± Saw consumers

y

Thematic Apperception Test (TAT)

TAT is a motivational research suggested by Consumer Metrics of Chicago. TAT is the pictures in the form of exhibits. The research concluded that West Coast is one of the faster growing markets for Hamilton Chain Saws.

The number of retail outlets and the service distributors in this area is in line with the

marketing strategy. Consumer Metrics sample California men who purchased HCS in 1977 and 1978. Warranty cards that listed the purchasers during these years were used as a samplingframe. The purpose of the study was to learn about the behaviour of the ultimate chain-saw consumers than about the use of chain-saws in public or private institutions. Out of 463 questionnaires mailed, 201 (43.4%) were returned and 18 (3.9%) were not delivered. The research shows that the people who purchased HCS Chain-Saw were 25 years or older. More than two third had combined family income of above $18,000 per annum and 57% were above $20,000 per annum. Out of all the people in the market, 5.5% users were professionals, 20% use it on their farms, 3% rent chain-saws and more than 70% can be classified as ³casual users´. The quality was rated good or excellent by 85% of the respondents and 75% were satisfied. 35% population purchase chain-saw from special stores, 20.5% from equipment store, 9.5% from hardware store, 7% from farm stores and 5% from sports stores. The research also reveals that only 32% of respondents were completely familiar with chain-saw, 44% said


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³somewhat familiar´, 19.5% said they were ³unfamiliar´ and 63.5% had no knowledge about it. Another interesting thing that came up was that, only 20% of all respondents had planned to buy Hamilton Chain-Saws.

Another important finding from this question was that, 45% of cases of purchase were influenced by the salesperson recommendations. Thus, the dealer can be an important part of the marketing of chain-saws. But we see that there are other influencing factors involved, as 26.5% of the respondents mentioned that the dealer had no influence on their decision, 16% said only some influence, and 6.5% said the dealer hardly influenced their decision. More than one-third of all respondents did not talk to the dealer or dealer salespersons the first time they visited the dealership. Only 21.5% saw the chain-saw demonstrated, and only 28.5% learnt the proper model of the chain-saw for their needs. In most cases, it looks as if the first visit was a passive buying visit to a chain saw salesperson. The responses indicate that most potential customers talked to a sales person, rather than looked at chain-saws. Thus, with some non-stocking dealers a customer would have to go to another store to see a chain-saw.


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QUESTION - ANSWERS a) Why would a company such as Hamilton Power Tools, wait so long before

conducting and using consumer research? What might be in your opinion the use of market research for managers? Answer:

Mr. John Hamilton, an egotistical successful entrepreneur, relied on his own hunches and believed that he knew his market. He also believed that they were doing very well in chainsaw sales over the past decade, but in 1970s, when the chain-saw market began to change rapidly; his executives realized that they need an expert advice. In March 1978, when chain saw market began to slow down because of seasonal nature of business, Mr. Campagna and Ray Johnson had a meeting with John Hamilton and were able to persuade that some consumer research was necessary. According to the group, marketing research aids managers in making decisions. Helps reduce uncertainty to a certain extent. As the competition is becoming fierce with the existing and new entrants in the market the need for marketing research is being realized as the most important thing. Another reason for importance of marketing research is changing environment.


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b) Evaluate the ³sampling ± frame´ used by Consumer Metrics. Does your group see any discomfort with the w ay CM went about their research (with speci al reference

to the sample ± frame used by them? Answer:

³Sampling ± frame´ used by Consumer Metrics is the warranty cards that listed the purchasers during the 1977 and 1978. This sampling frame is not a true representative of the population. As the survey shows, out of these people, 63.5% have no knowledge about the chain ± saw. This shows that the research was not systematic. It is given that 463 questionnaires were mailed out of which 201 were returned and 18 were not delivered, there is no information regarding remaining 214. Were these questionnaires emailed or left at the door step or was it a telephone conversation. It is not mentioned in the research findings. Consumer Metrics should have considered salespersons, owners and other public. They were cantered to the data already collected. Consumer Metrics should have approached the general public to get a clearer picture of the market. They could have made a telephonic conversation.


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c) Develop a marketing pl an based upon the information provided in the case. What in your group¶s opinion is a marketing plan? Wh at are the salient inputs you see this research has given you which may have impact on marketing ± mix variables that may be planned ± and on the understanding of the marketer vis vis the target market. Answer: Steps

involved in marketing plan:1.

Describe your business and product.

2. Identify your t arget market. 3. Define the budget.

1. Describe your bu siness and pr od uct l ine in det ail . What are its mo st significant feat ures? I s t he pr od uct still in development , or is it read y t o r oll ?

Hamilton Power Tools Corporation had been marketing industrial products for more than 30 years, by catering to the needs of construction and industrial tool markets. Their product line includes tools such as power trowels, concrete vibrators, generators, and power driven tools. Industrial line includes pneumatic tools: drills, screw drivers, etc. The Gasoline Powered Chain ± Saw was one of their products which were different from traditional tools. The chain ± saw was added in 1949 to diversify the company into other markets.


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2.

I dentif y your t arget market. Who will t his pr od uct appeal t o mo st? I nclude all market research, including hist orical fig ures f or sal es o f your t ype o f pr od uct.

According to Mr. Campagna who had been in chain-saw business for 15 years, the state of chain-saw industry in the last few years was composed of following markets: professionals (lumber jacks), farmers, institutions, and casual users (home or estate owners)

Several

years ago, the marketing executive at Hamilton Power Tools Corp.

included a short questionnaire on the warranty cards which was returned by the user on the purchase of the HCS. According to that survey, the fastest growing segment was the homeowner or the casual user market, which consisted of a ³weekend wood-cutter´.

Consumer Metrics of Chicago was hired by Hamilton to handle two market research projects; survey of chain-saw consumer and Thematic Apperception Test (TAT). According to Consumer Metrics, the West Coast is one of the fastest growing markets for Hamilton Chain Saws hence, California men who purchased HCS chain ± saw in 1977 and 1978 were the best sample. The warranty cards were the sampling frame and the cards that gave the institutional names were rejected, because the focus was on behavior of ultimate chain saw consumer rather than the chain saw use in public or private institutions.


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According to the group, the omitting of the cards with institutional names was a blunder, Consumer Metrics should have considered all the cards and in addition to this, they could have left some questionnaires with the shop owners who would have got them filled from their customers. Considering only warranty card survey customers does not cover the whole market of California or the West Coast. A sample should be a true representative of population.

The group would have considered the warranty card survey, interviewed the shop owners, salespersons, and questionnaire filled from the customers. Focus Group Discussions and Expertise Group Discussions would be included.

3.

Define t he budget. What is t he co st o f your pr od uct?

There is no mention about the budget of the research and the budget of the product in the case.

The group would have conducted a research on what was the perception of the end customer regarding the pricing of the product, whether they were satisfied with the pricing strategy or not.

On analyzing the Hamilton Power Tools Corporation following are the strengths and weaknesses of the Hamilton Power Tools Corporation:

S trengt h s:

market share in the industrial, professional and product technology

are high.


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W eaknesses- No preparation for changing market trend and lack in info on the

casual user market

According to the group , Marketing Plan is marketing mix + Marketing strategy + time and cost related details This research has provided us with the quality assessment, retail outlets with Hamilton Chain ± Saws, number of times dealers visited, number of different dealers visited, length of respondents had been thinking of purchasing a chain saw, respondents familiarity with chain saws, specific brand names on first visit, brand of chain saw, dealer/salesperson influence were; 85% rated a good or excellent and 75% rated satisfactory, 35% obtain HCS from speciality stores, 20.5% from equipment stores, 9.5% from hardware store, 7% from farm stores and 5% from sports store, more than 60% respondents visited two or more stores, 32% were familiar with chain±saw, 44$ were somewhat familiar, 19.5% were unfamiliar and 63.5% had no knowledge of it, and only 20% respondents had planned to purchase Hamilton Chain± Saws, 50% had another brand name in mind at first purchase but 30% planned to purchase a Hamilton Chain± Saw, 45% dealer/salesperson recommendation, 6.5% hardly had any influence and 21.5% saw chain saw demonstration and 28.5% learned the proper model. These are all salient inputs provided by the research and ca n impact on marketing mix.


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d) What further information in your group¶s opinion might be needed before a complete marketing pl an could be submitted o H amilton¶s management? Answer:

Out of the four P¶s; Price, Place, Product and Promotion, ³Price´ was not mentioned in the questionnaire. Price is one of the most important factors as it affects the purchasing decision of the customer. Customer Metrics should have considered a question that address respondents¶ satisfaction with the pricing strategy of the Hamilton Chain ± Saw. The research should be true representative of the population whereas, the population considered here is not a true representative. The data is biased because; the researcher looked from his advantage. He found it easy to research within the customer base of the people who bought the chain ± saw in 1977 and 1978.


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e) Is there any particular approach to research and demand forecast your group recommends to Hamilton Power Tools? Answer:

The research conducted by Consumer Metrics was a well performed research except there were few drawbacks and flaws in their research strategy. The researcher did not include the Focus Group Discussions and questionnaires for salespersons and store owners. According to the target market, the sample size and sample frame taken is incorrect, the sample frame is not a true representative of the population. The researcher has given no information regarding the remaining 214 questionnaires. The customers who purchased questionnaires in 1977 and 1978 were focused, rest were ignored. Assuming that not all the customers return the warranty card survey forms, researcher should have interviewed the salesperson regarding what is the proportion or percentage of people visiting the store per day and how many are for the purchase of chain ± saw. Out of that number, how many purchase Hamilton Chain ± Saw and do all of them return the warranty card survey sheet? This will help us learn whether the sample frame chosen is true representative and relevant, and will it lead to relevant findings.


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f ) Do you believe there is any learning from this case pertaining to importance of market research? Answer:

Through this case we learnt that qualitative research helps us to know how and why things happen. Qualitative research is conducted by collecting data and then analyzing it. This case also helps us to understand that through qualitative research we can att ain in-depth understanding of situations. Another thing we learnt from this research is that, research is not worthy until and unless it is not a ³True Representative of the Population´.


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Rel ati onshi p t o the Conce pt This case helps us to understand the importance of market research, especially qualitative research. Through this case we can see that qualitative research help us to know how and why things happen. This case shows us how qualitative research is conducted by data collection and then analyzed. Through the research findings, Hamilton Power Tools Corporation found that the fastest growth in the chain-saw market was in the homeowner or the casual user market segment. This market consisted of the ³weekend woo d-cutter´, who once or twice a year used a chain-saw to cut firewood or to prune trees in the backyard. This case also helps us to understand that through qualitative research we can attain in-depth understanding of situation. One more thing his case taught us is; a research is not worthy until and unless it is not a ³True Representative of the Population´. The researcher disclosed that he sent out 463 questionnaires out of which 201 came back and 18 were not delivered and is not talking about rest 214 questionnaires, and has not disclosed the method of the research. The data should not be biased.


hamilton case solution

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