Caterpillar Inc.

Last week I shared an article on merchandising to build your brand. This article shows how the merchandising team at Caterpillar has been careful to adhere to the brand’s core values as well as being creative in expanding the merchandise products.

Caterpillar Inc.

By JIM HARRIS, 20 November 2013,

Construction and mining sites are probably not considered by many to be the most colorful of locations. However, for more than 85 years, bright yellow has shone brilliantly amidst the sea of greys and browns commonly associated with these sites, thanks to Caterpillar.

This manufacturer’s Cat® brand of signature yellow dozers, backhoes, excavators and hundreds of other pieces of heavy equipment is so well-accepted in the industries it serves that the company has earned its spot as the world’s leading construction and mining equipment maker.

Mines and building sites are not the only places where the Cat logo can be found. Boots, cell phones, toys and even lifestyle items available at equipment dealerships and store shelves around the world all bear the company’s distinctive brand.

Caterpillar’s licensing efforts help it assist its existing dealer base, many of which use merchandise such as hats or t-shirts in their marketing efforts or as a way to show their allegiance to the Cat brand. Other target markets include not only equipment owners and operators, but also the lifestyle consumer.

The company is unique among licensors in that it is a business-to-business manufacturer and service provider that sells its core products directly to dealers, who then sell to a specialized customer base.

“There aren’t many business-to-business brands that can translate well to the business-to-consumer base, but we have a great brand that people want to be connected with,” Brand Advocacy and Licensing Manager Kenny Beaupre says. “Our success as a company is really about making an emotional connection and making our customers more successful. Translating that connection into consumer products is something that has helped us extend our brand to new audiences.”

Related Article: Why a Good Brand is Important to Your Marketing Strategy

A Legacy in Licensing

In addition to the Cat logo, all Caterpillar licensed products bear the company’s central attributes of strength, heritage, durability and pride. “We have great licensing partners who really dig in and get what we call a `yellow blood’ transfusion when we sign them up,” Beaupre says. “We expose them to our manufacturing facility and headquarters to give them a clear sense of the brand and what we’re about.”

The company selects licensees based on their distribution, capabilities and product lines. “We’re looking for partners willing to invest in our brand and who do their best to understand it and help our customers succeed,” he adds. “We’re deliberate about our brand and how we put it out there. We don’t want to put our name on something just because we can sell it. We are strategic.”

Several of the company’s licensees have worked with Caterpillar for more than 20 years. One licensee, scale model maker the Norscot Group, was among the first to develop Cat licensed products in the 1950s.

Caterpillar expanded its licensing efforts beyond scale models in the late 1980s, which led to them  working with Wolverine Worldwide on a Cat branded safety boot. “As we developed and expanded our licensing strategy, we wanted to keep as close to our core as we could, so we looked to our equipment operators and developed things that would help them do a better job,” Beaupre says.

The brand expanded further into a workwear line produced by SRI Apparel Limited, as well as safety eyewear and other products meant to stand up to the rigors of the jobs performed by Cat operators.

The need for durable products led Caterpillar to team up with the Bullitt Group to produce a line of Cat Tough Android smartphones. The phones, which recently debuted in the United States after a successful launch in Europe, feature a sturdy, water-resistant rubber body. “Although most people think about the strength and durability of our products, innovation is also an attribute of the Cat brand,” Beaupre says. “This is a rugged, tough phone that doesn’t stray from our brand.”

‘A Steady Pulse’

Caterpillar’s licensing efforts in recent years have extended beyond the worksite into a number of categories. One enduring category is children’s products and toys, which include riding products from the MEGA Group as well as a line of toy trucks from Toy State.

Lifestyle items are also a growing category. Our strategy has evolved from what our operators need on the worksite to what they might need on the weekends,” Beaupre says.

The company in 2009 launched the first of what is now a growing number of retail lifestyle stores internationally. There are now 78 stores worldwide, with further expansion anticipated.

Sales of Caterpillar licensed merchandise remain steady both in and out of the official stores, with more than $1.12 billion in revenue reported in 2012.

“The Cat brand is enduring,” Beaupre says. “We don’t have a lot of spikes or valleys, just steady movement upward.”

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