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Module: CE00317-2 Management & Planning

Title: Marketing Strategy of JC Bamford Excavators Ltd

Student ID: 01911525 - Staffordshire University

EAT01205818 - Stoke-on-Trent College

Date: 7th January 2004

For the attention of: Geoff Leese

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Index

Index........................................................................................................................... 2
Abstract...................................................................................................................... 3
The ‘JCB’ Brand..........................................................................................................3
Early Innovation & Marketing......................................................................................3
Marketing Mix.............................................................................................................4
Product - Quality.....................................................................................................4
Product - Range......................................................................................................4
Product – Brand......................................................................................................5
Product – Service....................................................................................................5
Price – Value........................................................................................................... 6
Promotion – Public relations....................................................................................6
Promotion – Exhibitions...........................................................................................6
Place – Locations....................................................................................................7
Place - Transport.....................................................................................................7
Market Segmentation..................................................................................................8
References.................................................................................................................8
Bibliography................................................................................................................8

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Abstract

Research & analysis has been carried out on the marketing strategies of JC Bamford
Excavators Ltd, in how it takes its products to markets across the world. The report
covers how the companies marketing mix has changed over time, and how it
differentiates its products in the different markets segments that it operates.

The ‘JCB’ Brand

Joseph Cyril Bamford founded JC Bamford Excavators Ltd in 1945, where at the time
the company was run from a 12 x 15 ft garage in Uttoxeter, Staffordshire. The
company now has factories globally employing thousands, yet despite the enormous
growth of the company, it remains privately owned by the Bamford family, making it
one of the largest privately owned family businesses in the world.

JC Bamford Excavators Ltd is commonly known as ‘JCB’, which are the initials of its
founder Joseph Cyril Bamford. These three letters provided the company with the
basis for a simplistic logo that has always remained the same, with the very first
product to bear the logo being the backhoe loader in 1953. The JCB brand is so
strong that the acronym JCB is often used when referring to diggers, just as vacuum
cleaners are often referred to as hoovers. JCB also has an entry in the Oxford
English Dictionary:

JCB
  • noun Brit. trademark a type of mechanical excavator with a shovel at the
front and a digging arm at the rear.
— ORIGIN the initials of J. C. Bamford, the makers. (www.AskOxford.com)

Early Innovation & Marketing

The founder of JCB is said to have been a brilliant marketeer, lead by innovation,
which is evident by looking at how the company began. JCB started by producing a
core product of tipping trailers, and after three years started to focus on hydraulics in
producing Europe’s first hydraulic tipping trailer. Innovation then lead JCB into
producing mechanical arms powered by hydraulics that were attached to tractors as
tools, and by 1953 what started off as a tool had been developed into its own fully
functional machine no longer dependent on the chassis of a tractor. Now that JCB

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had a strong formal product branded with the JCB logo, Joseph added a novel
feature to the new 3C model that was launched in 1964. The 3C backhoe loader
come with the facility of being able to boil a kettle inside the cab, and every 3C
ordered would also be supplied with a JCB kettle delivered in person by Joseph
Bamford - from this point on no longer did JCB sell just a core/formal product, but
now a augmented product with additional benefits to rival its competitors. This
innovation and marketing excellence has followed through to the present day, by
means of diversifying into new markets, increasing brand loyalty, creating supporting
services to its main business and focusing on customer requirements.

Marketing Mix

As an established company, JCB have a strong marketing mix that has helped to
promote them to where they are today. JCB’s marketing mix is made from a
combination of a good range of quality products, fair pricing, good promotion and
vast product placement; each area comprising of one or more sub-elements, that
may overlap into another section of the mix.

Product - Quality
To see JCB’s ability in producing good quality products, clients need only look at their
history and achievements - JCB are the largest manufacture of backhoe loaders in
Europe which has been in manufacture for over 51 years, which in itself is testament
to the quality and success of their product. Also focusing on JCB’s attitude towards
quality rather than quantity is their website which states they do not aim to be the
largest manufacturer of commercial/industrial, agricultural and material handling
equipment, but the best. Marketing in this way by aiming to be the best would influent
prospective clients, helping to increase sales and therefore increase the size of the
company. Advertising an aim of wanting to be the largest manufacture would have no
impact on sales, as this aim would be an achievement of the company, and not
perceived as any benefit to prospective clients.

Product - Range
Another element of the marketing mix is the product range. After developing a best
seller, the 3C backhoe loader, JCB knew it would need more than one successful
product to sustain its growth, and so JCB’s product range has grown from just one to
between nine and thirteen product types, with130 to 160 different models. This is an
indication of how committed JCB are to new development, which has lead to the wide

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depth of products we now see today. So not only do JCB promote quality, but have a
good range of products for clients to choose from. This also shows how forward
looking the company is, by looking for gaps in the market place and listening to what
customers need. JCB have recently announced in a network newsletter that plans
have begun to produce their own diesel engines at a 160,000 sq ft plant in
Derbyshire, UK – another development in the JCB range
(http://www.jcb.com/newsletter/newsletter1.pdf - retrieved January 2004).

Product – Brand
As mentioned earlier, JCB have a strong brand name that is recognised globally, and
being a well-established company gives JCB an advantage. This brand will give
prospective clients confidence in the product, and could make the difference in a
prospective client choosing a JCB over a competitors. A strong brand identity has
immeasurable value to a company, as it is not an asset that can be brought or sold,
and building a strong brand takes time and hard work. To build and make use of the
strong JCB brand, the company have diversified into a number of markets, including:

 Insurance
 Training
 Finance
 Organic Food
 Clothing
 Toys
 DIY Tools

Product – Service
To aid clients in purchasing and running JCB products, JCB have setup other
companies to support their main business. One support company, JCB Finance Ltd,
provides finance for the purchase of new JCB’s. Another support company, JCB
Insurance Ltd, provides insurance policies catered to the type of businesses likely to
use JCB equipment, such as rental or construction companies. Another company,
JCB Training Ltd, provides training on the operation of JCB machinery. Although
these companies were setup to support JCB’s main business activities, they also
function independently, for example JCB Finance Ltd will provide finance to
companies in general, providing the funds are not used to buy products in
competition to JCB. JCB Insurance Ltd also provides insurance to the public, motor

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insurance for example. These companies are also an example of how JCB have
diversified into finance, insurance and training markets.

Price – Value
For a product to sell it must be priced competitively, but with the strength of the
pound being so high in some countries this can sometimes prove difficult. In order for
JCB to be competitive while at the same time remaining profitable, JCB have
invested in manufacturing and assembly plants abroad. This enables JCB to source
parts in local countries at local prices and removes restrictions that may normally be
in place by import/export regulations. This is one reason why JCB opened a new
manufacturing plant in Georgia USA in 2000, to enable them to take a bigger share
of the US market.

Promotion – Public relations

JCB work hard on their public relations and do a number of things to constantly
improve their image with the public.

 JCB landscape and conserve many acres of land at their World and US Head
Quarters helping the all types of wildlife and making the company very
environmentally friendly.
 JCB have recently donated space to the US Air force museum at their US
head quarters, which will attract a lot of visitors to the vicinity of the JCB plant.
 In the past four years JCB have donated at least:
o £50,000 to the NSPCC.
o £12,000 to comic relief
o A £35,000 3CX backhoe loader to an Elephant Sanctuary in Sri
Lanka.
o In 2002 diverted delivery of a 22 ton excavator to help repair flood
defences following major flooding in the Czech Republic.
o In 2001 loaned a £35,000 3CX to clear more than 1,000 tonnes of
waste in Bellingshausen, and trained five volunteer operators at
facilities in Derbyshire.

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 o JCB are donating £1,000,000 worth of equipment to aid the clear up
operation in Asia following the tsunami disaster. This equipment is
being supplied by JCB India and other dealers in the affected regions.

Promotion – Exhibitions
In the early days Joseph Bamford would demonstrate the agility of their backhoe
loader by making it perform at exhibitions to astonished crowds, these shows are
now performed by a team of backhoe loaders and operators, who are now known as
the ‘Dancing Diggers’. The dancing diggers performed at Desert Inn in Las Vegas in
1999 where their performance was broadcast live on local television. Due to the high
interest, they performed again in Las Vegas at Conexpo 2002, a Construction
Exhibition, where they performed on stage every hour.

Place – Locations
With JCB having manufacturing plants on four continents and 542 registered dealers
with 930 locations worldwide, JCB is able to sell its products to over 150 countries.
JCB registered dealers can be supported by JCB sales that are located in the UK,
Australia, Belgium, Brazil, France, Germany, India, Italy, Netherlands, Spain & USA.
Due to the extent of JCB's distribution network, the company is able to spread the
risk of economic downturn in any one country, and by having manufacturing plants
on different continents allows JCB to compete better in target markets where the
pound is high, which lead to the development of JCB's manufacturing plant in
Georgia, USA opening in 2000. This $100,000 investment was due to JCB's desire to
take a greater share in the large US market. In my opinion it is not JCB's intension to
move manufacturing abroad as JCB currently export 70% of its UK production,
furthermore JCB's plants abroad are mainly for the production of their core product -
the backhoe loader, rather than their entire range. It is for these reasons I believe
JCB will only manufacture within local markets when they see a need to increase
their share in such markets, such as USA, as manufacturing locally allows JCB to be
more competitive by sourcing parts at local prices and evading duty and import
restrictions. Setting up manufacturing plants abroad is also expensive, so JCB are
only likely to do if they see a long term return on their investment in a particular
market. The current target markets are USA, Europe & the developing world.

Place - Transport
Due to the size and weight of JCB’s machinery, Joseph Bamford found it difficult to
transport their equipment for demonstrations to prospective buyers across the UK

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and Europe. For this reason JCB brought a company jet & helicopter, branded with
the company logo, so that prospective clients could be flown to and from JCB’s World
Head Quarters is the shortest possible time.

Market Segmentation

JCB target three market segments, they are agricultural, commercial/industrial &
ground care. JCB target a combination of their 9 to 13 product groups to each of the
three segments, of which some products overlap, with ground care having the
smallest number of product groups. This is because the requirements of ground care
companies are not as large as those of agricultural & commercial businesses; they
do not have a requirement for large excavating equipment.

References

AskOxford.com, Retrieved Jan 2005, from: http://www.askoxford.com/results/?

view=dict&field-
12668446=jcb&branch=13842570&textsearchtype=exact&sortorder=score%2Cname

JCB, 2005, Network Newsletter, retrieved Jan 2005 from:

http://www.jcb.com/newsletter/newletter1.pdf

Bibliography

JCB, 2005, Construction, Agricultural and Materials Handling Equipment,

http://www.jcb.com

Off-Highway Research, August 2004, Company Profile JCB.

http://www.offhighway.co.uk/samples/jcb.pdf