In today's combative marketplace, making any significant progress against skillful and large rivals is nothing short of a colossal achievement. Case Corporation, a manufacturer of construction and farm equipment, can make such a claim, but only after spending two years digging itself out of decline—operating losses for 1991 and 1992 reached USD 900,000—and are finally showing growth. Case's net income increased more than 300 per cent in 1994 to USD 165 million, with a 14 per cent sales increase, and 1995 revenues reached USD 4.2 billion.
Significant headway toward recovery began in 1994 when new CEO, Jean-Pierre Rosso, launched a new era at Case. His matter-of-fact pronouncement: "We need to be asking what the farmer and contractor need", triggered the company's turnaround and kindled a new respect from its customers.
Basic as it may seem, for most of the 1980s, "asking" was not a part of Case's product-driven orientation. Result: under performing products such low-horsepower tractors entered the marketplace, fueled by low prices and sales incentives.
Worse yet, when market demand eventually plummeted, dealers found themselves stuck with a glut of unsold Case equipment. To further aggravate the situation, relationships with dealers were increasingly greeted with suspecion.
In the face of those dire conditions, Rosso issued his market-driven directive that pressed Case managers to determine the wants and needs of its customers. One incident showcases the process they used to obtain reliable customer feedback: A contractor was flown in to Case's Burlington, Iowa test site and put to work for three days testing a piece of Case equipment and comparing its performance with that of comparable Caterpillar and Deere machines. Each day managers grilled the customer about features, benefits, and problems.
In another approach, Case sent teams of engineers and marketing personnel to talk to key customers and users of competitors' equipment. Applying what they learned from the feedback, engineers developed prototype machines and shipped them to hundreds of participating users for evaluation. The engineers then incorporated actual field data into final prototypes.
The bottom line: All this market-driven "asking" is a far cry from the Case's reputation during the 1980s of being one of the most mismanaged companies in field.
- Although things seem to be going well for Case, can you identify any potential mistakes they made in doing their research?
- How could they gather secondary data on product category?