The consumer market is a hot target for a lot of companies, and it's also a tough place to compete. Yet Caterpillar has made the corporate decision to sell into that market and the steps the company is taking show a high level of commitment to growing into this market segment. This is the story of how a major company builds its way into a new business.
First product out of the chute is a series of four portable generators with a range of design features not found on competitive models. The new business is also supported by an extensive marketing infrastructure that's consumer-focused and provides support for a range of retailers. Yes, Caterpillar is going to sell equipment through what are called "Big Box" stores like Lowe's and Home Depot, a first for the company.
Why is this significant? It's a major market move by a major market player. For farmers reading this while they're wearing their comfortable Cat work boots or work clothing, it's important to know that this generator is not a simple licensed product like the clothing. For the clothing companies pay Cat to use their name, for these generators – this is a Cat-designed product and is being built to company specifications by a Chinese manufacturing partner.
Before embarking on the move to market to design and build the generators, Tony McAllister, Omni Channel Manager, explained that significant research was done with 800 potential consumers of portable generators. From that they learned of the different levels of consumer buyers from the person they called "Jill" who has little need for a generator, but wants one and needs help analyzing the choice, to "Rob" who wants a generator but may need a little help running it, and finally "Dave" who is a contractor and just wants the tech specs so he can make the right purchase.
McAllister explains that the work showed them that the consumer wants a "robust, high-quality generator with user-friendly features." And the company went through the normal Caterpillar process of validation of the product, the user experience in the field and a number of prototypes. In fact there were more than a dozen iterations of the generator, each to work through design issues before settling on what the company is offering the market now.
They even worked hard on the box the product comes in. It carries key features of the product and helps with the "sell" in the retail outlet. It's interesting marketing, and shows that Caterpillar is committing resources to a new market area and these new generators are just the first of what will grow into a line of Cat products.
Where products are sold
The new products will be sold through Caterpillar dealers (those that take the contract), online through e-Commerce companies, in multi-channel outlets like Blain's Farm & Fleet and others (they're already available at Blain's). They company is also signing up, and training, certified servicing dealers who will provide support if there's a problem. McCallister says there was one important goal: "That the consumer have a seamless experience across multiple touch points."
That means if you buy the generator at a big-box store, but it needs service it will be easy for you to find a local certified servicing dealer who will happily repair the product. They will know if it's in warranty or not (you don't have to remember your receipt).
The company will even offer an added year of warranty for new buyers that register their generators online – providing three years of warranty coverage for the new machines.
Sum it up and Caterpillar has made a significant investment in online support resources – including YouTube videos on how to use the product, downloadable manuals, easy parts identification systems – and other tools that today's consumer expects from companies. The Omni Channel marketing division is also doing something Caterpillar has seldom done in the past – worked directly with the end-user of the product.
In the past, for the big rigs from the company that customers have come to know and love, the key interface was through the dealer. Even online support was usually handled through your Cat dealer. With the new Home and Outdoor Power Division of Caterpillar, the company is connecting directly to the customer for support and information; and eventually they will offer the generators through direct sales (though for now online sales are handled through retailers that already offer the service). For Caterpillar this is a whole new world.
And what about the product?
There are four models in the inaugural line of portable generators from the new Home and Outdoor Power Division of Catepillar known as the RP series. Each model designates its running power in watts.
The RP3600 has 4500 watts of starting power, and offers 3500 watts of continuous power. The RP5500 has 5500 6875 watts of starting power. The RP6500 E offers 8,125 watts of starting power and electric start. And the top end RP7500 E offers 9,375 watts of starting power and electric start.
All four units have a similar basic design with all connections and controls grouped at one end, right near the pull-start (which is available even on the electric-start models). Starting with a clean sheet design, Caterpillar engineers focused on what consumers wanted and listened carefully. For example, when "Jill" said that the pull-start was too stiff, engineers redesigned that feature.
The gas fill area is located conveniently on top with a wide, easy to turn cap for access for the fill. They even put the fill in a depression so that if you over fill or slop with the gas can, the excess fluid is contained.
Instructions for starting, and stopping, the generator are clearly printed on top along with instructions in multiple languages. The pictogram instructions are color coded with green instructions showing how to start up the machine, and red for stopping it.
Electric start models have a heavy duty lithium ion battery that's designed to hold a charge for a year, so the generator is ready when you need it. But if you go longer than a year, using the pull-start will get the generator going, and that lithium ion battery will recharge, so you can have electric start available again.
The generators are all built to be pulled, and the weight and balance are such that it's easy to move even the largest 7500 E with one hand. The cart design is also a kind of roll cage for the generator with outer dimensions that protect sensitive parts. This isn't so much for the casual user, but for the contractor that may throw an generator in the back of a truck where it could get jostled in transport.
And one final note, this is the first time Caterpillar has sold a gasoline-powered product. The company has long been the "diesel king" but for the Home and Outdoor Power market, gasoline power makes sense.
Nick Kelsch, Omni Channel marketing manager, notes that there are models built specifically for California, and those for the other 49 states. "These four models are what we have for North America today," he adds.
Kelsch notes that attention to detail in the design is important for a consumer product. As for price? The Caterpillar portable generators will carry a small premium over competitors, but he explains that the company worked hard to provide all the features consumer research found while still working within the parameters of a competitive generator market.
Given the extensive marketing work, and the support infrastructure Caterpillar has created for this new division launch, it's obvious that more products are on the way. Stay tuned.
Learn more about the RP series at cat.com/homeandoutdoorpower