Camar Automotive Hoist (CAH) produces top quality automotive hoists. The company is currently faced with making a critical decision which may significantly effect its future operations and long term competitiveness. The president, Mark Camar has just received a proposal about the option to enter into the European market, prepared by the Camar marketing manager. Mark Camar must decide on a course of action that will maximize profits and keep risk to a minimum level. Issues:
Camar’s current marketing strategy does not maximize market share potential. Presently, 75% of sales are generated from small businesses. Therefore, the marketing strategy must address the issue in order to be able to focus on its large volume of small business clientele. Camar is faced with making the decision of how, where and when to expand. The three feasible choices are: 1.Enter European Market through Direct Investment
2.Enter European Market through License
3.Expand Sales-force in U.S., and simultaneously enter the European Market through Joint Venture
Presently, customers are not informed about the different types of hoists sold and are unable to distinguish brand differences. Thus, promotional strategies need to concentrate on product and brand differentiation. In doing so, customers from perceiving lifts as having few product differences between them. Due to this, customers purchasing a hoist will experience dissonance reducing buying behavior. Company Analysis:
Strengths: Mark Camar’s passion for personally engineering the Camar Lift Hoist and his extensive experience in the hoist industry are the fundamental strengths of Camar. Camar currently has an excellent reputation as an industry leader in superior safety features on the Lift, which are supplemented by a five year warranty. Camar has successfully acquired large scale accounts by consistently surpassing the quality of major competitors’ safety features. The Camar Hoist is also favoured by customers because of its innovative mechanisms which allow for rapid installation procedures and minimize the need for maintenance. The existence of NAFTA offers Camar a competitive advantage due to the ease of trade available with the United States. Also, Camar owns four patents which protect the Lift’s unique features from competitors trying to duplicate them. As a strategic promotional tool, Camar’s potential buyers are mailed a catalogue containing detailed information about the Camar Lift which allow them to have information prior to contact with CAH. This strategy allows customers to educate themselves about the Lift and generate any additional questions for the sales representatives when making the actual purchase decision. In addition, several custom features can be added to the Camar Lift to make it suitable for a variety of tasks, including rust proofing, muffler repairs, and general mechanical repairs. Weaknesses: Camar is faced with the difficulty of increasing its market share. The company’s small market share is largely due to customer unawareness of brand differences, and the fact that its U.S wholesaler focuses only 20% of its efforts to CAH. Furthermore, Camar’s premium price is a potential deterring factor in customer purchases. Also, Camar only offers one type of hoist, which is the Scissor Lift. This results in Camar losing out on potential profits from selling different types of hoists such as the In-ground Single Post Hoist, or the Surface Four Post Hoist. Opportunities: Camar faces many opportunities for expansion in several geographic areas. Considerations for increasing market share, and thus sales volume, include expanding into the European market, and the option of eliminating the use of a wholesaler in nine U.S eastern states. Since the eastern states generate the largest sales volume, the U.S. wholesaler can be replaced in these nine states with a much more aggressive sales force pushing the product and creating brand...