Columbia Industries Inc. 523t6p

PGDM 2013-2015 | B2B-B | Group-1

B2B MARKETING | Case Analysis

COLUMBIA INDUSTRIES, INC.

COLUMBIA INDUSTRIES INC. 950 employees (550 in Vancouver)

Annual sales: $176mn ($102mn in Vancouver)

Company Info

Core Business

Established in 1948 in Vancouver, British Columbia • Largest manufacturer of code-approved products for connecting, reducing, repairing pipes used in sewer and drain waste applications • Expanding internationally – new branches in Toronto and Los Angeles • Large network of specialized distributors, supply houses and mass merchandisers for serving customers

CI product Line includes: • Couplings • Flex seal couplings • Large diameter repair couplings • Inflatable plugs • Specialty couplings

•

BUSINESS MARKET CUSTOMER COMMERCIAL ENTERPRISES- •

PRODUCT- Foundation Good, Accessory Equipment

ISSUE, CONSEQUENCES AT CI ISSUES   

High lift-truck downtime Stability of Hyster lift-trucks at full load Addressing CI’s rapid expansion (sales & demands)

CONSEQUENCES    

High maintenance expenses Risk to performance Safety of lift-truck drivers Inability to deliver timely  

Loss of valuable clients Impact on revenue generation

BUYING CENTER- Individual Roles & Responsibilities



Personal Stakeholders Lift-truck operators  Lift-truck mechanic  Plant Engineer  Industrial Engineer 



Influential 



Stuart West- Industrial Engineer

Experts Lift-truck mechanic  Jacques Debre- Plant Manager  Sandra Ogrosky- Plant Engineer 

BUYING SITUATION



Modified Rebuy Situation Benefits derived by reevaluating lift –truck supplier alternatives  Well defined basic criteria ○ 260” lift height ○ Total Lift- Stability of counterbalanced fork-lift truck at full load/mast ○ Quality, Reliability over life cycle- Performance factors such as turning radius ○ Easy but low maintenance costs & efforts for engineers ○ Short learning curve for operators ○ Quick service options by supplier- Supplier proximity for engineering functions 



Buying Decision Approach 

Simple modified rebuy

BUYGRID FRAMEWORK- CI’s Buying Situation 1. PROBLEM RECOGNITION CI’s Hyster lift trucks are not operationally safe, not reliable, and not sufficient in number to address business requirement

2. GENERAL DESCRIPTION OF NEEDS Purchase of 7 new lift trucks with stability at full loads and fully extended masts, and conforming to technical specifications 3. PRODUCT SPECIFICATIONS Total lift of at least 260 inches (mast fully extended ) Stability at full load Lower turning radius for better maneuverability, low width of truck

4. SUPPLIER SEARCH Purchasing Department: Company policy mandated narrowing down of suppliers were narrowed down to 5 brands of lift trucks (safety, down time, service) ing each supplier and request quotes and demonstrations

5. ACQUISITION & ANALYSIS OF PROPOSAL Demos to truck operators and mechanics, Presentations to management Final analysis done by West and Ogroasky; final decision with Debre

SUPPLIER SELECTION

SEGMENTING PURCHASE CATEGORY

High

Advertising Branded Finished Goods Telemarketing Revenue Impact / Business Risk

Critical Components High tech products/services Outsourced Manufacturing functions



Revenue Impact/Business risk 



Procurement Complexity Considerations 

Materials Logistics Benefts Professional Services

Travel Office Supplies

Low Low

Procurement Complexity

High

Impact of purchase on corporate revenues over time- High

Level of complexity of the cost drivers of purchase ○ ○ ○



Technology/ design complexity- Medium-High Scope of supply chain integration - High Relevance of lifecycle costs- High

Trade-off between focus on impact on revenue generation or greatest risk to performance

FORCES INFLUENCING BUYING BEHAVIOR AT CI

ENVIRONMENTAL FORCES

Growth in British Columbia/ Vancouver regional economy- Population growth, housing, municipal development- Growth in domestic market for CI products

ORGANIZATIONAL FORCES

Rapid expansion of company- Vancouver plant’s sales & demands Growing Customer Defection- Low operational capacity, untimely delivery

Buying Behavior at CI GROUP FORCES

INDIVIDUAL FORCES

Influential ’ group- Debre, West, Ogrosky PLANT UNION: Lift Truck Operators’ group- Operational safety Lift Truck Mechanics’ group-- Manitenance

Jacques Debre, Plant Manager- Position, Experience, Hesitance to purchase from a brand with no previous mutual business Stuart West, Industrial Engineer- Expertise, influence, interaction with company salesmen Sandra Ogrosky, Plant Engineer- Plant maintenance, reduction of downtimePerformance monitoring, productivity analysis

COMPARISON- Suppliers & Performance Factors

û

û

û

Dimensions

Yale

Komatsu

Caterpillar

Hyster

Toyota

Demonstration

ü

û

ü

ü

ü

Performance

ü

NA

ü

û

û

Trade-in

Yes

No

No

Yes

No

Service Proximity

ü

û

ü

û

NA

Warranty

3750

2250

3000

5000

4500

Follow-up (salesman)

weekly

No

2 weeks

weekly

2 weeks

Operator’s Confidence

ü

û

ü

û

û

Mechanic’s Confidence

ü

û

ü

ü

ü

YALE vs. CATERPILLAR- Technical Specs

ü

Dimensions

Yale

Caterpillar

Turning Radius (Maneuverability)

78.7

79

Lifting Speed (E/F)

133/117 fhp

112/104 fhp

Travel Speed

10.9 mph

10.5 mph

Total Lift

265 > 260

262 > 260

Total Cost (including trade-in)

$17,380

$20,990

YALE vs. CATERPILLAR- Procurement Trends

YALE

CATERPILLAR

Supplier proximity consideration





Longer term - Closer relationship





Closer interaction across products/functions





Thank You

References Hutt, M., & Speh, T. (2012 ). Business Marketing Management: B2B. Cengage Learning.