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Snap-on, Inc: A Unique Go-to-Market Strategy

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Stormy Johansen

on 17 October 2013

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Transcript of Snap-on, Inc: A Unique Go-to-Market Strategy

A Unique Go-to-Market Strategy
Discussion Questions
Question 1
Part 1:
Channel design begins with an assessment of end-user customer needs. Assess the strength of Snap-on's dealer van channel in serving customer needs in the vehicle service market (for example, auto repair shops).
Part 2:
Next, consider possible adjustments that might be required to serve customer needs in adjacent markets that the firm is exploring, such as aerospace companies and utilities.

Question 2
Outline strategies that Snap-on might follow to capitalize on its strong brand in the vehicle service market and extend its reach into other industry sectors.
Part 1: Assessing Snap-On's strengths in dealer van channel
Weaknesses
expensive
timely
can't serve large amount of companies at once


Ash Boland
Stormy Johansen
Patrick Taylor

HOW DO THEY DO IT?
Marketing Strategy
Direct to business with demonstrations
Franchised dealers
excellent training programs
excellent customer service







WHAT IS SNAP-ON, INC?
Company member of Standard & Poor 500
Innovative products, strong brand, service-focused distribution strategy
Leading share in professional tools market


WHAT DO THEY DO?
Serves vehicle service market
Serves technicians
marine
aviation
government and industrial
Bread and Butter: Independent repair shops
Case Overview
WHERE ARE THEY GOING?
Expand product offering
aerospace
power generation
Strengths
market leader
mobility
accessibility
interpersonal interaction
good customer relationships
excellent customer service
Opportunities
expand into e-service
requested visits
expand into other industry sectors
Threats
competitors with cheaper sales force
competitors who are internet based
OVERALL STRONG BRAND
Needs: Solution solving products, know how to use product, gain value from good/service
Part 2: Adjustments to channel design to serve aerospace & utilities industries
The Channel Decision Process
End User Focus; Define Customer Segments
Identify & Prioritise Customer's Channel Requirements by Segment
Assess the Firm's Capabilities to Meet Customer Requirements
Benchmark to Competitors
Create Customer Solutions to Customer's Latent Needs
Step 6
"Snap-on competes on the basis of its product quality and performance, product line breadth and depth, service, brand awareness and imagery, and technological innovation. While no single company competes with Snap-on across all of its product lines and distribution channels, various companies compete in one or more product categories and/or distribution channels"
(Snap-On 10K 2009)
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Power Generation
Aerospace
Information
After sales service
Product Customisation
Product quality assurance
After sale service
Assortment
Product customisation
Product quality assurance

Strengths
Weaknesses
Power Generation
Aerospace
Don't have a channel to efficiently and effectively market to aerospace and power generation
Current dealers are tailored to selling through moving van-not best channel for these bigger companies
Dealers specialize in vehicle sector, not aerospace or utilities
Innovative strong, recognized brand
Desirable
Provide quality assurance
Reputation for excellent customer service
Excellent training program
compete using internet for sales
compete using catalogs (Grainger)
some companies use van strategy similar to Snap-on's
Innovative products tailored to meet their needs
Excellent customer service
Highly informed sales people
Suppliers that work with them to create solutions through their products
After sale support
Flexible and adaptable supplers that can keep up to their changing requirements/ new innovations
Aerospace and Utilites Need:
Evaluate & Select Channel Options
Option 1: Continue with van channel for vehicle sector and alter van channel to expand into aerospace/utility sectors.
Option 2: Continue with van channel for vehicle sector but also introduce online store. Use reps to work with and market new innovative products in aerospace/utilites sectors.
Option 3: Switch vehicle sector to online, and use van channel to distribute to aerospace/utilities.
expensive (more staff, more vans)
would need to create new training program
current staff specialize only in vehicle sector
inefficient
aerospace/utilities need more customized products
weekly visits would be too frequent

Not Recommended because:
Recommended because:
online store keeps Snap-on in line with competition
less frequent need for van visits =reduced labour costs
reps will be specialists in aerospace/utilities
reps are most cost efficient intermediary in this case
Not Recommended because:
discontinuing use of van distribution will ruin customer relationships in vehicle sector
expensive to train van distribution staff for selling to aerospace &utilities industry
van channel will be inefficient in showcasing the tools designed for new industries
tools will need to be customized for different industries (i.e. wind power vs. hydro power)- requires too may different vans/training programs
Recommended Strategies for Snap-on
Vision: The most valued productivity solutions in the world
Fulfill this message for aerospace & utilities
Work with aerospace and utilities to develop effective product solutions
Use innovative solutions
1. Figure out the problem
2. Analyze the problem
3. Classify the decision criteria
4. Come up with more than one solution
5. Choose the best
A Solution-centered Strategy
Gain customers by emphasizing strong innovative brand
Create a brand mantra for these industries
Hire highly qualified representatives to advertise to aerospace/utilities
Good quality products, extended warranty, responsive technicians
Market to companies wanting to be innovative
Emphasize strong customer relationships
Rep-customer relationships- linking the manufacturer with the industrial end user
Solid customer relationships compared to other tool companies (Black & Decker)
Scheduled visits, follow-ups, writing orders
CRM systems
Distribution
Representative- specialist in industry
Online site of current products
customization for each company
Products delivered and installed by Snap-On








Main Gap
Do not provide highly customized products
Do not provide good enough after sales service, i.e. warranty

References
(2013). Snap-on Annual report. Available: http://thomson.mobular.net/thomson/7/3049/4154/. Last accessed 16th Oct 2013.

BusinessDictionary.com. 2013. 5 Steps to Developing an Innovative Solution to a Problem. [online] Available at: http://www.businessdictionary.com/article/728/innovative-companies-solve-problems-for-customers/ [Accessed: 17 Oct 2013].


Hutt, M & Speh, T, 2013, South Western Cengage Learning, Mason, USA.
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