Customer Classification and customer profile

Customer Classification Page 1 | CATERPILLAR CONFIDENTIAL: YELLOW
SCALING NEW HEIGHTS IN EXECUTION
Customer Classification
Overview
2014
Marcial Jr. Militante
Business Development
Service Mktg. Specialist

What is Customer Classification?
• Objective: Classify a customer based on their primary business type
• Classify customers by one principal industry and subsequently collect transaction
data for those customers for all business the dealer transacts with the customer
• Journey of Classification
– From major split of customers by geography … to a fully segmented business
by Customer Industry (primarily)
– From today’s Principal Work Code (PWC) reporting only which aims to
capture an individual machine’s initial application … to a primary industry
plus the transactions related to the customer

Why are we doing Customer Classification?
• Enterprise Alignment
– End-to-End responsibility for a group of customers
• Connecting the business to customers
• Work across the customers’ value chain including all relevant products and
services
• View of customer profit contribution to drive the Group’s decisions and
enhance profitability
• For large accounts, centralized coverage in customer’s home base region with
global coordination
• For customers that work in multiple Industries, lead account manager works
across Industries to serve customers

How will Customer Classification benefit the dealer?
• Support at Cat determined by customer segment (know
who to call)
• Faster communication & resolution of issues
– Shorter communication structure
– Clarified responsibility & decision rights
– Single point of accountability
• More industry specialists – the “oak trees”
• Better recognition of Customer Value-chain
– Customer focused not product or industry focused
• Product & service development aligned to customer
value drivers
• Dedicated dealer development responsibility
Beyond
Product
45%
Brand
10%
Product
45%
Caterpillar’s Value Proposition

Vision for Information Usage at Dealer & Caterpillar
• Data mining & analysis
– Understand the customer
• What jobs they do
• What products they use
• What services they require
• Regional variations
• Identify most valuable customers
– Across Dealers / Territories / Industries
• Identify most valuable industry sub-segments
– What customers are in what industries and where
– What is the opportunity
• Align product & service development with customer business
requirements and value creation
• Develop Distribution requirements
• Find what’s missing
• Feed the marketing planning and business planning process
– Single source for VOC
Understanding how
value is delivered,
begins by
understanding what the
customer is trying to
accomplish

Caterpillar Industries
Machine Industries
• Mining
• Quarry & Aggregates
• Large Contractor
• Waste
• Industrial
• Local Contractor
• Agriculture
• Forestry
• Government
• Pipeline
Customers will be
classified into one
primary industry

• Mining
– Contains all customers, surface and underground, primarily involved in the business of extraction of
metals (copper, iron ore, gold, led, zinc, uranium, etc.) and non-metallic minerals (coal, salt, talcum,
oil sands, phosphate, diamonds, etc.).
• Quarry & Aggregates
– Contains all customers primarily involved in the extraction, handling, processing and sale of crushed
rock, stone, sand, gravel, cement, ready-mix concrete, concrete products, lime, gypsum products,
recycled aggregates and clay.
• Waste
– Inclusive of all waste management operations including landfill & site construction, collection,
transportation, processing, incineration, disposal & renewable energy production.
• Industrial
– The Industrial Market consists of scrap and recycled materials handling, demolition, utility
companies, port/stevedore/bulk handling, manufacturing, brick and glass products, primary & fab.
metal products, petroleum, chemical & rubber, ag commodities and food products, wholesale and
retail trade. This is not a homogenous market. Sub-industry value chains are dissimilar and not
linked. Work involved includes the processing and handling of material.
• Forestry
– Customers engaged in the management of forests and related natural resources for the production and
supply of wood fiber and services to wood fiber businesses. Primary work includes a wide variety of
management, harvesting, handling, and processing of wood fiber and sale of wood products. A
broad range of purpose-built machines, along with traditional machines and specialized work tools
support this industry.

• Pipeline
– Contractors engaged in the construction of Mainline Pipeline projects which includes all phases of
construction and major maintenance of mainline pipelines used for the transmission of all
commodities.
• Local Contractor
– Local/regional territory of operation, cash-flow sensitive, typically working as a sub-contractor or on
small projects, typically operating smaller machines (below 20t), typically <10 employees and
typically <10 machines in developed countries and <4 in developing countries.
• Large Contractor
– Traditional heavy construction contractors who generally focus on multiple sub-industries, utilize
core Caterpillar machines, typically have more than 11 employees, and who do business locally,
regionally, nationally and internationally.
• Agriculture
– Contains those customers in food production. Segments of agriculture include beef producers, dairy
producers, poultry producers and pork producers in animal production. In crop and plant production
you will have customers who grow and produce corn, soybeans, wheat, fruits and vegetables. In
addition you will have companies that provide support to these producers providing the inputs for
their operations. Examples to include fertilizer companies, feed companies, etc.
• Governmental
– Federal, state and local governments including counties, townships, municipalities, public utilities,
special authorities (airports), not-for-profits, port authorities and aboriginal groups (Native American,
Inuit etc.).

Industry Decision Tree
Is the customer a Federal
Government OR military sales
OR a governmental agency purchasing under a
Government tender OR a Government
Department OR Municipality? Excludes
State Owned Enterprises
GovernmentalYES
Customer is a plant hire/ rental
house?
NO
YES
Is the largest share of the
customer's income/ revenue in
Mining, Quarry & Aggregates,
Waste, Pipeline, Industrial,
Forestry, Agriculture?
NO
Classify respective
industry
Customer
NO
Is the customer
a large contractor or a local
contractor based on the
Guidelines?
Large Contractor Local Contractor
YES
Is the company a rental
distribution channel based on the
Rental Guidelines?
YES
Rental/ Plant Hire
NO

Rental & Local Contractor Guidelines
• Guidelines to Determine if a Company is a Rental Distribution Channel
– Does the company offer similar services to similar end users as The Cat Rental
Store?
– Does the company rent without operators only?
– Does the company manage the business by financial utilization?
– Does the company get by paid by a period of time (hours, days, weeks, etc.)?
– Does the company see renting from another company as a missed opportunity?
• Guidelines to Determine if a Customer is a LOCAL Contractor
– Does the customer primarily operate BCP sized equipment?
– Does the customer have less than 10 non-seasonal employees?
– Does the customer operate a machine(s) less than 2000 hours per year?
– For customers in North America, South America, Australia-Pacific, Japan,
Europe, Africa, CIS & Middle East, does the customer have less than 10
machines (Cat & Non-Cat, competitive-sized) or earn an annual revenue less
than $5M USD?
– For customers in the Asia Pacific region (except Australia-Pacific and Japan),
does the customer have less than 4 machines or earn an annual revenue less
than $1M USD?

Governmental Classification Guidelines
• A customer is private if:
– Autonomy to prospect (move around to bid on jobs)
– Ability to make money, produce a profit
– Operates as a private enterprise, even if it is government owned
• A customer is governmental if:
– Operates as a municipality (I.e. does the normal activities to maintain a
town/county/state like road maintenance, garbage, cleaning, sewer and
water, etc.)
– Operates only in its own territory / self-contained (purchases
equipment to do their own work and does not do work outside their
territory)

Other Equipment
• Equipment to be included in “Number of machines” is Cat and Non-Cat
Competitive-sized equivalent
• Equipment not included:
– On-highway trucks
– Lift trucks
– Water pumps driven by engine
– Allied equipment
– Agriculture equipment

Classification Solution
Solution Description
• CIC Code: Four-position alpha and numeric code that is assigned to each customer
based on the type of work the customer is primarily engaged in
• Assign a customer with one CIC code at a master customer data level (code does not
change often)
• Use existing CIC process to obtain top-tier classification by modifying existing and
adding additional CIC codes (primarily for Local and Large)
Top-Tier
LG 24
Primary
Sub-Industry
+
Large Contractor
Residential
Construction
Customer Industry Code (CIC)
155: Landscaping
150: Nurseries
240: Building, Residential
250: Building, Commercial
Landscaping
Residential Building
Commercial Building
Principle Work Code (PWC)Sub-SegmentsSegment
General
Construction

Rental Channel Classification
• Rental Classification
– EQ52 - Rental Company - Independent Local (Businesses primarily
engaged in rental of equipment, generators or rental services items,
locally owned and operated.)
– EQ53 - Rental Company National / Regional (Businesses primarily
engaged in rental of equipment, generators or rental services items,
regional or national in scope, operating from multiple locations.)
– EQ54 - Rental Company with Operators (Businesses primary - not
necessarily exclusively - engaged in rental of equipment with
operators.)
No rollup to a
customer industry

Other Types of Classification
• Miscellaneous Classification
– EQ10 - Dealers - Machinery, Equipment and Supplies (Caterpillar
affiliated)
– EQ15 - Sub-Dealers - Machinery, Equipment and Supplies (Caterpillar
affiliated)
– EQ20 - Dealers - Machinery, Equipment and Supplies (OEM
affiliated)
– EQ30 - Brokers, Auctions, Resellers and Independent Dealers
– EQ40 - Equipment and Engine Salvage
– EQ50 - Rental Company (Caterpillar Dealer Affiliated)
– EQ51 - Rental Company (OEM Dealer Affiliated)
– EQ99 - Equipment Repair Parts Services
No rollup to a
customer industry;
Tactical in nature as
every sales
transaction will need
a CIC code

Local Contractors – Customer Profile
People
Local Contractors are cash flow oriented. They get paid when a job is done, and in turn decide what bills will be paid from this
income, and which will wait until the next job is finished. One side of their reputation is built based on how they manage this. The
other side is formed by their ability to satisfactorily complete the work when they committed. Whether working for a homeowner,
or subcontracting for a large contractor, when they can get it done is a big element of their daily activity.
Observable behavior:
 Can do. Local Contactors want to be recognized as capable.They observe and imitate other contractors, looking for the best methods to complete a
type of job. Regional techniques often emerge.
 Live Free. Going in business is a lifestyle choice. They respect others who have made the same choice and it can influence where they go for
supplies.
 Inseparable. Social networks become a platform for marketing, with referrals and word of mouth being the key medium. Likewise, the local
business community continuously judges and legitimizes his company. For a small local contractor, it is not just business, it is personal.
 Conflicted. If his business grows, the local small contractor faces a fork in the road to become a large contractor or remain small. He will choose
to trade the raw satisfaction of building, for time to “see” more people. He also chooses to trade some individual freedom as he becomes more
dependent on employees, suppliers, and customers The desire for more respect and income may be visible, but the tradeoffs may not be readily
apparent.
Work
A local contractor’s work is likewise small by comparison, lasting from a couple days to a couple weeks. They typically work within a 50
mile radius. Working for private individuals, they usually contribute the design of the project and there may or may not be blue prints.
They act as a subcontractor frequently. They commonly choose to work in earthmoving, specialty trades (masons, plumbers,
electricians), landscaping, and agricultural industries (clearing, soil erosion, irrigation).
Tasks are highly varied ranging from removal, clearing, and demolition activities, to installation, finishing, and structural
construction, with everything in between. While they may have a core capability, if work comes up that requires them to take on
adjacent vertical elements to get the work, they can be convinced to do more than they care to. For instance, a sewer contractor may do
the hookup to a house, even though he’d rather stick to main line installation. Again, they learn by watching others to gain the knowledge
necessary to get the work they want.

Large Contractor – Customer Profile
People
Large Contractors are project oriented. Success is determined by effectively managing the construction of civil engineered projects to
completion on time and in spec. Time is at the front of their thoughts. Companies rely on competitive advantages built in during the
bidding process to turn a profit. Site managers may, and do deviate from the methods originally estimated and any project inevitability
becomes a series of “lost and found” margins.
 Pride in ability to develop and deploy unique methods to complete tasks – (choice of systems, job setup).
It is a key to how they differentiate and compete.
 Loath rework – (water content resulting inadequate compaction, material slides, interpretation of prints, errors in grade)
 Paranoid of unexpected events that impact the schedule. (loyal to subcontractors they trust, lodging crews at a distance, delivery commitments
from suppliers)
 Acutely aware of resource burden (fleet utilization, balance sheets and cash specifically for bonding). This drives them to manage a work
backlog.
 Hungry for growth. ( HR, Financials, Territory expansion)
In many cases, a large contractor has been in business for more than 25 years and has been passed on as a family business. This is evident with
family names as company titles.
Projects
Common projects large contractors pursue include: Roads, Bridges, Airports, Dams, Irrigation Systems, Building Sites, Sewer, Water
and other Underground Utilities.
Major Job tasks can be broken into: Prep (clearing, environmental installation), Cutting (blasting, ripping, hammering, trenching,
loading, hauling), Filling (crushing, hauling, compacting) Installing (lifting, base material placement, compaction, paving), Finishing
(grading, seeding, landscaping).
While some contractors choose to specialize, a great number engage in multiple project types. By their own description, Earthmoving is
what they do and is the common thread between them. The acute awareness of resource investment leads some companies beyond
contracting, into plant hire and rental where they can leverage their knowledge of equipment ownership and operating costs, as well as
apply developed concepts of financial leverage and asset utilization.

Mining – Customer Profile
People
Miners are process oriented. Success is determined by effectively managing ongoing and relatively steady state processes – working towards the
optimization of their longer term resource. Production and Cost are balanced against Time to optimize their resource within the commodity cycle.
Activities considered core vary by customer with a range from pure exploration and investment (outsourcing all operational activities) through to
complete in-house operations and maintenance including end-product delivery. Customers range in size from global mega players, to
local/regional in scale.
 Continuously improving the operations through effective application of people and scale.
 Pursuit of uptime. Maintenance is the primary “owner” of mobile equipment. Their view is reliability and cost related. They are
seen as delivering uptime to the operation. Machine availability is the primary metric.
 Internal conflict. The size of these companies requires organizational division. The best miners are those that can effectively
combine the opposing interests of maintenance and operations.
 Wealthy. Most miners and mine contractors are resource rich (money, people, and expertise) due to the scale of their projects and
the downside risk of poor performance. Consistency of performance allows them to narrow their reserve.
Operations
Mines around the world vary significantly in type, scale, and location. They are commonly at the larger end of our industry norm and located in
remote (often hard to access) zones. Once established they will usually operate for many years (15-30 being normal).
Major job tasks can be broken into: Site Preparation and Access (establish roads, access tunnels, etc.), Drill and Blast (breaking rock),
Overburden Removal (moving non ore bearing material – typically the most significant earthmoving activity, load and haul, push, dragline),
Ore Extraction (load and haul, continuous mining), and Support Activities (access road maintenance, haul road maintenance, drainage,
processing support).

Industrial – Customer Profile
People
Industrial businesses work on the fringes of other larger industries and their work is process oriented. It is common for them to
have long-term contracts with their customers including a number of performance penalties. Significant amount of business
opportunity exist beyond the initial sale, which can be high margin if tied to the customer’s performance penalties. Partnerships
with key suppliers are valued.
 Professionally Dirty – Whether processing slag, scrap, steel, radioactive waste, or working on the river, industrial businesses are dirty.
They combat this environment with processes and strive for a professional image.
 Entrepreneurial – Industrial people see money where no one else does. They enter and exit businesses / projects quickly depending on
the money. Being on the fringe of larger industries drives creativity.
 Competitive – Industry circles are relatively small and participation in trade groups is high. Networks are tight and there is a history of
deals won and deals lost between customers. Loyalties build in this tight, competitive environment.
 Squeezed – Industrial customers are often caught in the middle. They deal with large, powerful unions (workers comp, training,
absentee, strikes, and grievances). They have to comply with significant regulations (OSHA for example). Ultimately, they serve large,
powerful customers – steel companies, shipping companies, large corporate offices. Cost sharing arrangements, for example, are
common.
Job-Site
Industrial customers work on job-sites. The job-sites are processing-orientated – cutting, moving, stacking, piling, loading. They
tend to have flexible equipment and use it for multiple processes. A few of these processes will be unique and not run everyday. For
this, they have equipment on stand-by or they stretch the use of their main processing equipment.
The job-sites are specialized and often fill a small area of an overall larger job-site, typically in the back. Job-sites may include:
scrap yards, steel mills, factories and ports. Job-sites tend to have piles and stacks. Equipment on a job-site may be intermixed with
other companies’ equipment.

Quarry & Aggregates – Customer Profile
People
Q&A customers are driven by production, cost per ton and profit. These fixed site businesses involve highly integrated processes oriented
around efficient production of rock, sand & gravel. Safety, environmental impact issues and acquisitions leading to industry consolidations have
been significant trends over the last decade. Customer size ranges form global corporate account groups to local family owned sand & gravel
pits.
 Friendly neighbors. A key driver in the cost of aggregates is transportation which drives locations in close proximity to communities served.
Significant investments in dust control, run-off and erosion control, noise management related to blasting and site reclamation are made to
avoid friction in the community. Restrictions on new site permitting have put a premium on existing reserves at current sites.
 Asset Managers. Maximizing uptime requires tracking and performing scheduled maintenance on assets, including crushers and conveyors.
They repair and rebuild components making them some of the worlds best at managing asset life cycles.
 Driven to lower cost per unit measured. Pit bosses watch operator techniques, blasting patterns experimented with, haul road lay-out and
maintenance, crusher capacity and stocking piling are examples of tweaks made everyday.
 Metrics Minded. The main office often posts daily production results, maintenance schedules, safety records and work rotations on large easy
to read whiteboards or monitors. Cooperation among local leaders and teams is typically high. Companies with multiple sites often engage in
friendly competition when comparing production rates.
The Quarry Site
Aggregates are produced primarily through sand and gravel operations, or stone quarrying. Geology determines between the two.
Sand and gravel is characterized virgin bank loading usually into mobile crushers and screens. Stone quarry requires blasting
and material is delivered to a stationary crusher. A pit boss is usually assigned to monitor the fleet and maximize production.
Like mining, operations and maintenance motives are not always aligned. In addition to the production operations, inventory of
finished product is maintained and sold from the same site. On site scales are many times combined with a main office. Not only is
the quarry a production facility, but also a direct sales outlet.

Waste – Customer Profile
People
Waste customers are service providers to their customers. They cover the spectrum of ownership: public, private and
governmental. They have industrial customers, commercial customers, residential customers, and serve one-off events. They are
process oriented, but the process differs by region because the waste composition and needs of the market differs by region.
These customers are at the front of a number of growing trends: recycling, green, alternative energy.
 Image – Whether collecting or compacting, waste customers strive to have their operations bright, clean and efficient.
 Focused on Customers – The one day a waste company fails to collect one of their customer’s trash can erase years of superior performance.
 Community Minded – Waste customers contend with the notion that few people welcome a waste dump in their backyard … being a good
neighbor is very important.
 Assets and People – Waste customers are constantly tracking their large fleets of equipment, trash bins and the people collecting the trash.
Reducing the number of people collectors and keeping them safe is significant.
 Green – Reclaiming used dumps, recycling, alternate fuels, landfill liners … waste customers are environmentally savvy and are at the
forefront of sustainability.
 Regulations – The waste industry is highly regulated driving waste customers to do a significant amount of recording, reporting and testing.
Operations
Waste operations can be broken into: collection (very low entry barriers), landfill disposal (new permits hard to get), recycling
(growing opportunity) and energy generation (waste-to-energy). Some customers are fully integrated across these areas.
Waste operations are adopting solutions that help them respond to their customers quicker and more accurately (did trash get
picked-up from a customer) and that help them get more from less (increasing compaction allowing them to get additional life out
of a dump).
More sophisticated waste operations and alternative methods of waste disposal in emerging markets are just starting to emerge.

Forestry – Customer Profile
People
Forestry customers typically work in small crews – containing a team of 5-10 people and a series of machines
depending on the harvest method, tree type and topography. A very typical crew working in plantation timber would
have a feller buncher, followed by a skidder/or forwarder a log loader and then a number of road trucks for delivery.
 Integrated Supply Chain - The logging crew will typically be highly integrated with the mill that is being supplied. Most mills function on a
“just in time” basis. Therefore the mill will control scheduling and locations in order to maximize system productivity while maintaining mill
throughput with minimal inventory. Logging crews thus operate on and off at the mills direction.
 Keep it in the Family - The logging becomes a family tradition carried on through the generations. The resourcefulness and skills of the trade
are handed down. Beyond the immediate family, loggers as a whole are a tight knit community, ready to help a fellow logger.
 Controlled- Mills and Paper companies have extended their control to the timber plots. Loggers subcontract the logging operation and their
contract spells out where and what they will cut, and what they will be paid. It is a common practice for a mill to “finance” the logger’s
equipment exerting further constraint on the logger’s financial room. Loggers are in a hard spot in the value chain.
Logging Operations
A logging crew is mobile. They cut in remote locations in most any conditions. Equipment is pushed to the extreme end of an
application zone. The nature of handling large trees is hazardous. Typical operations involve build/clearing access roads, cutting
and processing, skidding/forwarding and loading on to on highway transport. The operation finishes at the mill with specialized
log loading equipment. Mechanization of processing varies with different levels of labor utilized.

Pipeline – Customer Profile
People
Pipeline Contractors are transient and highly mobile and have relied on strong relationships with key
suppliers/distributors, who understand their business needs and follow them from project to project to ensure needs are
met regardless of location.
Typical pipeliner is a hands-on manager, with multi-generation heritage in the business, 15 to 40 years of experience,
well connected in the industry, places high value on business knowledge, responsiveness, relationship, and trust from key
suppliers who understand their business needs. Demands regional and global consistency for machines and product
support
Pipeline contractors are high production oriented, demanding single point of accountability from the suppliers and ability
to solve multiple problems and meet various needs. They are skeptical about product innovation and value robust,
proven technologies. Although they are traditionally used to taking care of their own equipment fleet by working in
remote locations or under severe weather conditions, they appreciate and value service support from our dealer channel
and can evolve into using a “do it with me” service model. Parts availability, commonality of product support,
convenience and speed are valued over price.
Customer Definition
The pipeline market is defined as a narrow, customer-focused segment, specialized in pipeline construction or the
construction applications related to the pipeline (Mainline/Distribution lines,Stations, DOT/PIP upgrades, Expansions,
Repairs, Integrity projects, Anomaly Investigations, Double jointing) Contractors are transient and highly mobile working on
multiple diameter cross-country projects traversing across multiple dealer territories for a limited timeframe (3-6 months
domestically and 12-18 months internationally).
There is a small group of pipeline customers, who operate both nationally(home country) and internationally on short-
duration construction projects with specific rentals requirements, unique specialty equipment (non-Cat) and traditional
machines with special configuration (TTT w/ angle blades, winches). They demand global consistency in procurement and
product support coverage; industry knowledge and responsiveness are highly valued.
Success in this industry lies in the targeted approach: having single accountability with a global critical mass to provide
equipment with greatest efficiency, ability to provide total solutions to all customer needs, maximize price realization, and
lowest cost of distribution.
Projects
Pipelines are the lifeblood of modern
civilization, delivering oil, natural gas,
water, or other products from the
source to the point of where they are
needed. Bringing energy and
resources to the world.
A pipeline construction project works
much like a fast moving assembly line:
it is broken into manageable lengths
(spreads), constructed by a highly
specialized pipeline contractor. As one
crew completes its work, the next crew
will move into position to complete its
portion of the construction process.
That’s why pipeliners need
reliability and uptime or they start
losing money. If you have a piece of
equipment go down, it shuts other
operations down.
A pipeline construction spread may be
50 to 150 miles in length, with the front
of the spread clearing and the back of
the spread restoring to natural state.
The contractors utilize Track-Type
Tractors (D6R/T,D7R, D8R/T),
Excavators (336DL, 345DL), Motor
Graders (14M), and Pipelayers. A
typical large diameter construction
spread will require 60 machines valued
at $30 Million per spread.

Governmental – Customer Profile
People
Governmental customers are primarily elected officials for cities, townships, counties, state and federal governments. This
group also includes Native American Tribes, special authorities (water districts, port authorities), not for profits (501C3) and
public utilities. The governmental market in North America is a consistent, stable industry that does not fluctuate much from
year to year. The Federal government along with Central and South America has larger fluctuations in purchases from year to
year.
 Low Bid – many agencies feel that they are required to purchase products from the lowest bidder
 Life Cycle Costing – some agencies are starting to look at the total cost of owning and operating a machine and considering that cost
rather than just the initial purchase price
 Contract Purchasing – state and federal agencies tend to negotiate a contract for each year (or more) that employees can buy from.
Local governments have historically gone to bid, but are starting to purchase off of contracts because of a simplified purchasing
process
 Budget Cycles – agencies tend to purchase items either at the beginning or end of a budget year (use it or lose it philosophy with
money)
 Relationship Selling – Relationships are key in selling to counties. They tend to be longer term employees and are more likely to
purchase based on past history or a total value message.
Operations
Governmental operations cover a wide variety of tasks all that focus on public service. Local and State governments are
responsible for everything from parks to landfills to highway construction and repair. Federal agencies require delivery around the
world and machine typically have very specific modifications including armor.
To meet these varied requirements governmental customers require a wide variety of machines that encompass nearly all of the
Caterpillar product line. Governmental customers are also looking at options to make their agencies more “green” and will look at
recycling, hybrid cars and cleaner engines as a positive benefit

Marine – Customer Profile
Ocean Going
• Long Hours/Distances – Economy vs. Speed
• Economical Transport of Materials and Goods
• Propulsion and Auxiliary Engines
• Types
– Container Ships
– Tankers
– Ferries
– Cruise Ships
– Feeder Vessels
• Customer Requirements
– Fuel Consumption
– Reliability
– Durability
Commercial
• Revenue Generating Application
• Variable operation / long hours
• Propulsion and Auxiliary engines
• Types:
– Tugs / Tows
– Supply Boats
– Fishing Boats
– Government / Military
• Customer Requirements
– Fuel Consumption
– Reliability / Durability
– Power Density (Speed)
– Maintenance / Operating Costs
Pleasure Craft
• End use is recreational
• Highly visible segment
• Propulsion and Auxiliary
• Types:
– Powerboats
– Sport Fishing
– Custom Yachts
• Customer Requirements:
– Power Density
– Reliability
– Speed

Petroleum – Customer Profile
• Well Servicing: Customers (either OEMs or end users) that use engines, transmission and packages for the Well Service
Industry used to complete new wells or improve production from existing wells (completion, stimulation, cementing,
fracturing, acidizing, nitrogen pumping, and blending). Also includes customers that use auxiliary power packs for the Well
Service Industry. This includes items from the Industrial, Petroleum, and Marine price lists.
• Petroleum Gas Compression: Customers that purchase gas engines used to drive compressors for the recovery, gathering,
processing, storage, and transmission of field gas, associated gas, or processed gas. All products that come from the Gas
Industrial price list.
• Drilling: Customers use engines, transmission and packages used to drill oil, gas or geothermal wells (including emergency
genset). This includes Petroleum, Industrial, EPG, and Marine price list products.
• Petroleum Production and Pumping: Customers use engines in the generation of mechanical and electrical power for
exploration, recovery and transmission of petroleum products including gathering, production, pumping, and refining
Applications include camp power, emergency gensets (non-drilling), prime power at production and storage facilities, cranes,
fire pumps, air compressors, primary or secondary recovery systems such as down hold pumps, water flood or disposal
systems, etc. This includes rental products which fit Petroleum Production/Pumping market segment description. This
includes Industrial, Marine, and EPG price list products.

Agriculture – Customer Profile
AG Operations
Ag Services
Custom cleans chicken barns; Lives in Kentucky; Owns 2 TH, 4 SSL,and 6 trucks; son and five hired staff; cost of fuel,
products and labor force him to get more barns cleaned faster; frustrated that Cat won’t custom build high capacity TH
for him.
Crop Production
Grows 10,000 acres of corn in Indiana; Owns two Lexion combines, 6 Deere ag tractors, two planters and Bobcat SSL;
brother and two hired staff help; relies on dealers for all equipment repairs and annual inspections, likes his Deere and
Cat dealer but neither could/would sell him SSL, weather and commodity prices are his stress factors.
Livestock
Has 150,000 head beef feedlot in Dalhart, Texas; Owns 6 wheel loaders, 2 SSL, 1 BHL, generator for backup power and
fleet of feed trucks;has 42 employees; high price of feed and fuel are taking away most profits; relies on dealer for all
equipment repairs and loaner/rental if any problems;
Mixed farming
Has 7000 milking cows and 20,000 acres of alfalfa in Kansas: Two sons and 120 hired staff keep operation going; has 7
Cat WL, 13 Cat TH, 2 Deere SSL, 32 Cat engines; finding good labor, maintaining animal health and milk price keep
stressed; uses Cat dealer for everything possible as he gets excellent services and is dealer branch largest customer in
units and dollars.
People
Generally Ag customers have between 5 to 20 employees, and their geographic reach is basically local. The Ag
customers are very loyal to local dealers, and relationship is key point for AG customers to be engaged with local
dealers. In terms of buying patterns, AG customers tend to purchase or lease machines. Used equipment role is
relevant to AG customers, as well new machines. The purchasing decisions are made at year end, and it is a very
price sensitive market. The AG customers are driven by commodities prices for their output, and in they use future
market indications to spread price risks.

Customer Classification and customer profile

More Related Content

What's hot

Similar to Customer Classification and customer profile

More from Marcial Jr Militante

Customer Classification and customer profile

Editor's Notes