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In this world of fierce brand competition, it's clear to see the importance of a strong brand strategy. The industrial sector is an unforgiving one and ultimately, the brand makes all the difference in the success or failure of the company. Let’s dig in and take a closer look at Caterpillar (CAT), a global leader in the construction and mining equipment industry, to understand the significance of brand strategy and how it can impact a company's success.
On Thanksgiving Day, 1904, the wheels came off -- literally. That's when Benjamin Holt revealed his new tread-based tractor to the world. During the photoshoot for this new machine, the photographer exclaimed that it crawled like a big “caterpillar” and the rest is brand naming history.
Since then, CAT has grown into a brand behemoth in the industrial sector. The company has been in business for over 90 years and boasts a strong reputation for quality, durability and innovation. CAT's brand strategy has been critical in establishing and maintaining its position in the market. The company has made significant efforts to create a consistent brand experience for customers, from product design to customer service.
So What is Brand Strategy Anyway?
Brand strategy is sometimes lumped in with marketing strategy but there is a difference between them:
Marketing strategy is more tactical, while brand strategy is more holistic, aiming to create an emotional connection between the brand and its audience.
Brand strategy is a comprehensive plan designed to achieve a series of long-term goals that lead to the recognition and preference of your brand by consumers. A successful branding strategy involves defining the brand's mission, its commitments to customers, and how these messages are conveyed.
Contrary to popular belief, a branding strategy is not solely based on a logo, color scheme, or website design. Although these elements are components of a branding strategy, successful strategies centre on intangibles that gradually build brand recognition, value, and perception.
CAT’s Brand Strategy Approach
CAT's long-term brand strategy efforts have been successful in many ways. The company has positioned itself as a premium brand in the construction and mining equipment category, and is one of the most recognizable industrial brands in the world. This brand recognition allows CAT to command a premium price for its equipment and maintain a strong market share in the industry. The company is also invested heavily in research and development to continuously innovate and improve its products. This investment allows CAT to stay ahead of its competitors and provide customers with the latest technology and features.
However, CAT's brand dominance has not been without challenges. Over the years, the company has faced relentless competition from new entrants in the market and established players (Like Deere and Co.) who have stepped up their game. This led to a decline in CAT's market share and profitability, and the company had to dig deep on brand strategy and work hard to retain its position as king of the hill vs. its category competitors.
To overcome this challenge, CAT decided to double-down on its brand strategy by making a significant shift in its marketing approach. One of these strategies was to boldly communicate its leadership position out into the mainstream through unique and creative “stunt” videos. It was an unconventional yet creative approach that highlighted the capability of the CAT machines.
The World’s Biggest Game of Jenga
As part of its “Built For It.” marketing campaign, CAT and its agency selected five of its machines and set up what would be the world’s biggest game of Jenga. Mind you, this version would be played with 600-pound blocks that would ultimately showcase the power and precision of the CAT machines. The YouTube video created for this remarkable stunt currently has 9.1M views. Check it out:
Does Brand Strategy Pay Off?
As a result of CAT’s relentless approach to its brand strategy, the industrial brand currently sits at the #83 spot for Interbrand’s 2022 Best Global Brands with a brand value of 7.4 billion dollars (+14% YOY).
In conclusion, CAT's brand success provides a great example of the importance of brand strategy for industrial companies. By investing in a strong brand strategy, industrial companies can differentiate themselves from their competitors, establish a premium position in the market, and command a higher price for their products.
As a B2B marketing technician, I encourage B2B industrial business owners to "dig deep" and consider brand strategy as a great investment for their brand. A well-executed brand strategy can have a significant impact on a company's success and help it stay ahead of the competition in the long run.
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