50075506 Hamilton Case Solution

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SUMMARY

Hamilton Power Tools with Mr Campagna, the marketing manager for Hamilton Tools is a sales

oriented company and wanted to adopt consumer oriented philosophy of the marketing concept.

For more than 30 years, Hamilton Power Tools had been marketing industrial products by

catering to the construction and industrial tool markets. Their construction product lines included

tools such as power trowels, concrete vibrators, generators, and power driven tools. Their

industrial lines were primarily pneumatic tools: drills, screw drivers etc. One of their products,

the gasoline powered chain saw, was somewhat different from the traditional construction and

industrial tools. It had the opportunity to acquire a small chain-saw manufacturer. The main

reason behind this was to diversify the company into other markets.

The chain-saw market was changing rapidly during 1970, and Hamilton Tools executives realise

that they needed some expert advice. Reports from trade publications, statistics from The Chain-

saw Manufacturers’ Association, and his personal experience of 15 years made him believe that

the state of the chain-saw industry was composed of professionals (lumber jacks), farmers,

institutions, and casual users. The marketing executive had a short questionnaire on the warranty

cards that purchasers returned after buying a Hamilton Chain-saw. According to the warranty

card “survey”, the fastest growth in the chain-saw market was in the homeowner or the casual

user market segment. This market consisted of the wood-cutters who used the chain-saw once or

twice a year to cut firewood or to prune trees in the backyard.

Chain-saw sales began to slow down because of the seasonal nature of the business in 1978 due

to which Mr Campagna and Ray Johnson had a meeting with John Hamilton and was able to

convince the executive that some consumer research was necessary.

Group – 1, Case – 1 (Hamilton Power Tools Corp.)

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The research was conducted by Consumer Metrics, by Frank Baggins and the presentation was

given in the presence of Dale Conway, Vice President of the research corporation. The research

was done in two parts:-

Survey of Chain – Saw consumers

Thematic Apperception Test (TAT)

TAT is a motivational research suggested by Consumer Metrics of Chicago. TAT is the pictures

in the form of exhibits.

The research concluded that West Coast is one of the faster growing markets for Hamilton Chain

Saws. The number of retail outlets and the service distributors in this area is in line with the

marketing strategy. Consumer Metrics sample California men who purchased HCS in 1977 and

1978. Warranty cards that listed the purchasers during these years were used as a sampling-

frame. The purpose of the study was to learn about the behaviour of the ultimate chain-saw

consumers than about the use of chain-saws in public or private institutions.

Out of 463 questionnaires mailed, 201 (43.4%) were returned and 18 (3.9%) were not delivered.

The research shows that the people who purchased HCS Chain-Saw were 25 years or older.

More than two third had combined family income of above $18,000 per annum and 57% were

above $20,000 per annum. Out of all the people in the market, 5.5% users were professionals,

20% use it on their farms, 3% rent chain-saws and more than 70% can be classified as “casual

users”. The quality was rated good or excellent by 85% of the respondents and 75% were

satisfied. 35% population purchase chain-saw from special stores, 20.5% from equipment store,

9.5% from hardware store, 7% from farm stores and 5% from sports stores. The research also

reveals that only 32% of respondents were completely familiar with chain-saw, 44% said


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“somewhat familiar”, 19.5% said they were “unfamiliar” and 63.5% had no knowledge about it.

Another interesting thing that came up was that, only 20% of all respondents had planned to buy

Hamilton Chain-Saws.

Another important finding from this question was that, 45% of cases of purchase were influenced

by the salesperson recommendations. Thus, the dealer can be an important part of the marketing

of chain-saws. But we see that there are other influencing factors involved, as 26.5% of the

respondents mentioned that the dealer had no influence on their decision, 16% said only some

influence, and 6.5% said the dealer hardly influenced their decision. More than one-third of all

respondents did not talk to the dealer or dealer salespersons the first time they visited the

dealership. Only 21.5% saw the chain-saw demonstrated, and only 28.5% learnt the proper

model of the chain-saw for their needs. In most cases, it looks as if the first visit was a passive

buying visit to a chain saw salesperson. The responses indicate that most potential customers

talked to a sales person, rather than looked at chain-saws. Thus, with some non-stocking dealers

a customer would have to go to another store to see a chain-saw.


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QUESTION - ANSWERS

a) Why would a company such as Hamilton Power Tools, wait so long before

conducting and using consumer research? What might be in your opinion the use of

market research for managers?

Answer:

Mr. John Hamilton, an egotistical successful entrepreneur, relied on his own hunches and

believed that he knew his market. He also believed that they were doing very well in chain-

saw sales over the past decade, but in 1970s, when the chain-saw market began to change

rapidly; his executives realized that they need an expert advice. In March 1978, when chain

saw market began to slow down because of seasonal nature of business, Mr. Campagna and

Ray Johnson had a meeting with John Hamilton and were able to persuade that some

consumer research was necessary.

According to the group, marketing research aids managers in making decisions. Helps reduce

uncertainty to a certain extent. As the competition is becoming fierce with the existing and

new entrants in the market the need for marketing research is being realized as the most

important thing. Another reason for importance of marketing research is changing

environment.


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b) Evaluate the “sampling – frame” used by Consumer Metrics. Does your group see

any discomfort with the way CM went about their research (with special reference

to the sample – frame used by them?

Answer:

“Sampling – frame” used by Consumer Metrics is the warranty cards that listed the

purchasers during the 1977 and 1978.

This sampling frame is not a true representative of the population. As the survey shows, out

of these people, 63.5% have no knowledge about the chain – saw. This shows that the

research was not systematic. It is given that 463 questionnaires were mailed out of which 201

were returned and 18 were not delivered, there is no information regarding remaining 214.

Were these questionnaires emailed or left at the door step or was it a telephone conversation.

It is not mentioned in the research findings.

Consumer Metrics should have considered salespersons, owners and other public. They were

cantered to the data already collected. Consumer Metrics should have approached the general

public to get a clearer picture of the market. They could have made a telephonic

conversation.


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c) Develop a marketing plan based upon the information provided in the case. What in

your group’s opinion is a marketing plan? What are the salient inputs you see this

research has given you which may have impact on marketing – mix variables that

may be planned – and on the understanding of the marketer vis vis the target

market.

Answer:

Steps involved in marketing plan:-

1. Describe your business and product.

2. Identify your target market.

3. Define the budget.

1. Describe your business and product line in detail. What are its most

significant features? Is the product still in development, or is it ready to roll?

Hamilton Power Tools Corporation had been marketing industrial products for

more than 30 years, by catering to the needs of construction and industrial tool

markets. Their product line includes tools such as power trowels, concrete

vibrators, generators, and power driven tools. Industrial line includes pneumatic

tools: drills, screw drivers, etc. The Gasoline Powered Chain – Saw was one of

their products which were different from traditional tools. The chain – saw was

added in 1949 to diversify the company into other markets.


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2. Identify your target market. Who will this product appeal to most? Include all

market research, including historical figures for sales of your type of product.

According to Mr. Campagna who had been in chain-saw business for 15

years, the state of chain-saw industry in the last few years was composed of

following markets: professionals (lumber jacks), farmers, institutions, and

casual users (home or estate owners)

Several years ago, the marketing executive at Hamilton Power Tools Corp.

included a short questionnaire on the warranty cards which was returned by

the user on the purchase of the HCS. According to that survey, the fastest

growing segment was the homeowner or the casual user market, which

consisted of a “weekend wood-cutter”.

Consumer Metrics of Chicago was hired by Hamilton to handle two market

research projects; survey of chain-saw consumer and Thematic Apperception

Test (TAT). According to Consumer Metrics, the West Coast is one of the

fastest growing markets for Hamilton Chain Saws hence, California men who

purchased HCS chain – saw in 1977 and 1978 were the best sample. The

warranty cards were the sampling frame and the cards that gave the

institutional names were rejected, because the focus was on behavior of

ultimate chain saw consumer rather than the chain saw use in public or private

institutions.


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According to the group, the omitting of the cards with institutional names was

a blunder, Consumer Metrics should have considered all the cards and in

addition to this, they could have left some questionnaires with the shop

owners who would have got them filled from their customers. Considering

only warranty card survey customers does not cover the whole market of

California or the West Coast. A sample should be a true representative of

population.

The group would have considered the warranty card survey, interviewed the

shop owners, salespersons, and questionnaire filled from the customers. Focus

Group Discussions and Expertise Group Discussions would be included.

3. Define the budget. What is the cost of your product?

There is no mention about the budget of the research and the budget of the

product in the case.

The group would have conducted a research on what was the perception of the

end customer regarding the pricing of the product, whether they were satisfied

with the pricing strategy or not.

On analyzing the Hamilton Power Tools Corporation following are the

strengths and weaknesses of the Hamilton Power Tools Corporation:

Strengths: market share in the industrial, professional and product technology

are high.


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Weaknesses- No preparation for changing market trend and lack in info on the

casual user market

According to the group, Marketing Plan is marketing mix + Marketing strategy +

time and cost related details

This research has provided us with the quality assessment, retail outlets with

Hamilton Chain – Saws, number of times dealers visited, number of different

dealers visited, length of respondents had been thinking of purchasing a chain

saw, respondents familiarity with chain saws, specific brand names on first visit,

brand of chain saw, dealer/salesperson influence were; 85% rated a good or

excellent and 75% rated satisfactory, 35% obtain HCS from speciality stores,

20.5% from equipment stores, 9.5% from hardware store, 7% from farm stores

and 5% from sports store, more than 60% respondents visited two or more stores,

32% were familiar with chain–saw, 44$ were somewhat familiar, 19.5% were

unfamiliar and 63.5% had no knowledge of it, and only 20% respondents had

planned to purchase Hamilton Chain–Saws, 50% had another brand name in mind

at first purchase but 30% planned to purchase a Hamilton Chain–Saw, 45%

dealer/salesperson recommendation, 6.5% hardly had any influence and 21.5%

saw chain saw demonstration and 28.5% learned the proper model. These are all

salient inputs provided by the research and can impact on marketing mix.


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d) What further information in your group’s opinion might be needed before a

complete marketing plan could be submitted o Hamilton’s management?

Answer:

Out of the four P’s; Price, Place, Product and Promotion, “Price” was not mentioned in

the questionnaire. Price is one of the most important factors as it affects the purchasing

decision of the customer. Customer Metrics should have considered a question that address

respondents’ satisfaction with the pricing strategy of the Hamilton Chain – Saw.

The research should be true representative of the population whereas, the population

considered here is not a true representative. The data is biased because; the researcher looked

from his advantage. He found it easy to research within the customer base of the people who

bought the chain – saw in 1977 and 1978.


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e) Is there any particular approach to research and demand forecast your group

recommends to Hamilton Power Tools?

Answer:

The research conducted by Consumer Metrics was a well performed research except there

were few drawbacks and flaws in their research strategy.

The researcher did not include the Focus Group Discussions and questionnaires for salespersons

and store owners.

According to the target market, the sample size and sample frame taken is incorrect, the sample

frame is not a true representative of the population. The researcher has given no information

regarding the remaining 214 questionnaires. The customers who purchased questionnaires in

1977 and 1978 were focused, rest were ignored. Assuming that not all the customers return the

warranty card survey forms, researcher should have interviewed the salesperson regarding what

is the proportion or percentage of people visiting the store per day and how many are for the

purchase of chain – saw. Out of that number, how many purchase Hamilton Chain – Saw and do

all of them return the warranty card survey sheet?

This will help us learn whether the sample frame chosen is true representative and relevant, and

will it lead to relevant findings.


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f) Do you believe there is any learning from this case pertaining to importance of

market research?

Answer:

Through this case we learnt that qualitative research helps us to know how and why

things happen. Qualitative research is conducted by collecting data and then analyzing it.

This case also helps us to understand that through qualitative research we can attain in-depth

understanding of situations.

Another thing we learnt from this research is that, research is not worthy until and unless it is

not a “True Representative of the Population”.


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Relationship to the Concept

This case helps us to understand the importance of market research, especially qualitative

research. Through this case we can see that qualitative research help us to know how and why

things happen. This case shows us how qualitative research is conducted by data collection and

then analyzed. Through the research findings, Hamilton Power Tools Corporation found that the

fastest growth in the chain-saw market was in the homeowner or the casual user market segment.

This market consisted of the “weekend wood-cutter”, who once or twice a year used a chain-saw

to cut firewood or to prune trees in the backyard. This case also helps us to understand that

through qualitative research we can attain in-depth understanding of situation.

One more thing his case taught us is; a research is not worthy until and unless it is not a “True

Representative of the Population”. The researcher disclosed that he sent out 463 questionnaires

out of which 201 came back and 18 were not delivered and is not talking about rest 214

questionnaires, and has not disclosed the method of the research. The data should not be biased.


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50075506 Hamilton Case Solution