trends and innovative marketing in international...
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Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 1www.hilti.com
Trends and innovative Marketing in international industrial Markets
Prof. Dr. Pius BascheraCEO Hilti Corporation
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 2www.hilti.com
Idee des Marketings:
Ausrichtung aller unternehmerischen Tätigkeiten auf die Befriedigung von Kundenbedürfnissen, und zwar im Einklang mit dem langfristigen
Erreichen von Rentabilitätszielen.
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 3www.hilti.com
Hilti hat basierend auf der Strategie Champion 3C profitables Wachstum erreicht
2'000
2'500
3'000
3'500
4'000
96 97 98 99 00 01 02 03 04 05
Umsatz (Mio CHF)
CAGR: 5.7%
10'00011'00012'00013'00014'00015'00016'00017'000
96 97 98 99 00 01 02 03 04 05
Mitarbeitende
CAGR: 3.7%
147 141
214247 255 262 241
273 295324
8.8%8.9%9.1%8.1%8.4%8.1%
6.6%5.5%
8.1%8.8%
96 97 98 99 00 01 02 03 04 05
op. profit return on sales
Betriebsergebnis und Umsatzrendite
CAGR: 9.2%
Weltweiter Baumarkt (Index)
100
110
120
96 97 98 99 00 01 02 03 04 05
CAGR: 1.5%
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 4www.hilti.com
The Hilti Business Model: Our base for sustainable, profitable growth
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 5www.hilti.com
The Hilti Business Model: Our base for sustainable, profitable growth
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 6www.hilti.com
Our Purpose
We passionately create enthusiastic customers and build a better future!
We live our values
The foundation of our culture is integrity, courage, teamwork and commitment.
Purpose and Values
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Enthusiastic customers
We create success for our customers by identifying their needs and providing innovative and value-adding solutions.
Purpose and Values
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 8www.hilti.com
Build a better future
We foster a company climate in which every team member is valued and able to grow.
We develop win-win relationships with our partners and suppliers.
We embrace our responsibility towards society and environment.
We aim to achieve significant and sustainable, profitable growth, thus securing our freedom of action.
Purpose and Values
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Our Values
The way we do things at Hilti is based on living strong values. We act with integrity in all we do, we demonstrate courage to go beyond the circle of habits, we outperform through teamwork, and we have commitment to personal and company growth.
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Corporate Culture as main driver of our success –and the result of hard work
We want team members that show initiative and take self-responsibility in their doing
Pre-requisite: clear alignment with purpose and values – all employees up to the Board of Directors! Our Culture Journey ‘team camps’support the change management process
Key factors:• Culture is not a program, it is
integrated into daily business• Commitment of the Leadership
team (EB, EMT) • 100% disciplined execution
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Monthly „Gipfeltreffen“
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The „Red Thread“ – people development at Hilti
Getting things done
Working with others
Functional expertise
Understanding the businessOur Culture Journey
Core Purpose & Values
Understanding and defining
what needs to be done
Developing yourself and
others
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The Hilti business model: Our base for sustainable, profitable growth
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 14www.hilti.com
Champion 3C Strategy
Customer:We want to be our customers’ best partner. Their requirements drive our actions.
Competency:We are committed to excellence in innovation, total quality, direct customer relationships and effective marketing.
Concentration:We focus on products and markets where we can achieve and sustain leadership positions.
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Ongoing strategic initiatives strengthen HILTI’s competitiveness
Product leadership
Concentration on selected product lines• Market leadership• Innovation potential• Added value
Implementation of application know-how
Operational excellence Market reach
Segmented go to market• Data-based SMP• Segmented org.
Targeted channel shift
New channel approaches
Effective CRM
Worldwide harmonized business processes• Efficiency• Customer satisfaction
Optimized production network
Cont. improvement
• Supply restructuring
• Global processes (GPD/H2)
• New breakthrough products (e.g. DX Gas, adhesives)
• Light duty tool family
• Asian dealer strategy
• Fleet Management
• ProShop
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The Hilti business model: Our base for sustainable, profitable growth
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 17www.hilti.com
We offer system solutions instead of stand-alone products
Drilling & demolition systems,Diamond systemsOpen
Execute workCutting, grinding
Fasten
Direct fastening
Screw fastening
Anchoring
Installation systems
CloseFoams, firestop
MeasureMeasuring systems
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We use several methods to ensure successful product innovationsSource for innovation ideas Methods
• Competition radar
• Trusted customers
• Lead-user-principle
• Work studies
• Idea-management
• Patent-search
• Technology radar
• Collaboration with universities
Customers
TechnologyOrganization
Understanding our customers „hidden“ needs is key
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We understand our customers - Example "Measuring"
Low-techLittle competition
Large potential for improvement (15-20% of total time)
Installation of cable runs
Measure 28%
Drill 17%
Set anchors 10%
Install hangers 10%
Mount brackets 14%
Install cable runs 21%
High-techMajor competition
Limited potential forimprovement (4-8% of total time)
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We provide innovative solutions – Example “Measuring”
PD 30: the smallest laser distance meter in construction
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Customers are closely integrated into our development process
G1Definition-
Phase G2Concept-
Phase G3Design-Phase G4
Launch-Preparation
Phase G5Market-
introductionPhase
5G6
Opportunity
Task
Targets:- Application/ solution- Cost- Revenues- Timing
Tested
FinalProduct Money
Analysis of customer problem and definition of relevant criteria for customer satisfaction
Concept testwith customers to select best solution and of several alternatives
Customer acceptance test to determine fulfilment of customer expectations
Pilot to confirm functionality and product quality in praxis
Customer feedback for first improvement measures
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 22www.hilti.com
The Hilti business model: Our base for sustainable, profitable growth
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 23www.hilti.com
Customer segmentation is key – MO example
F&D market by trade and size (in mio €)
0%
20%
40%
60%
80%
100%
Mini/Small Medium Large/MegaSource: MO fact base 2004
BC CES&MWoodIF SCM E
127 12141621 331 22
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Some segments are more attractive than others –MO example
BC IF SM M E Civil
2.
Ease of market entry / risk
15%
Weighting
Trade potential
5. 6.
30%
Trade profitability
30%
Buying behavior 15%
Product portfolio 10%
Ranking 1. 3. 4.
Rather unfavorableVery favorable
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We know where the potential is – MO example
Total potentialABC customersInterior Finishing
in Germany
Coverage and penetration
Interior Finishingin Germany
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Our direct sales model is based on five direct sales channels
• Independent stationary sales outlets
• HILTI products only• Service center
• National call centers• Personal relationships
with customers• Inbound and outbound
• HILTI’s traditional channel• Outstanding technical/application competence
as key differentiator
• Stationary sales outlets• Within partner distributor
• Global internet platform• Personalized
online order forms
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The different channels target different customer segments
BC CES&MWoodIF SCM E
3
0%
20%
40%
60%
80%
100%
Mini/Small Medium Large/Mega
127 1214162131 22
Key Account
Segmentated sales force
ProShop
E-business andCustomer Service
Source: MO fact base 2004
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ProShop: Direct selling at traffic points
Hosts• Generalists or trade specialists• Only market leaders (e.g. Home Depot,
St. Gobain, Danske Traelast, Wolseley)• Self service store concepts• > 70% pro customers
Hilti ProShop• 25 – 30 sqm of display area• Hilti store managers full-time• Hilti owns stock, sets price, knows
customer• Partner gets commission on sales
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Multi-channel customers buy more – MO example
0
5'000
10'000
15'000
20'000
25'000
1 2 3 4
Sales / customer (CHF)
# of channels used
#channels
Avrg. order size
1 300 CHF
2 330 CHF
3 410 CHF
4 430 CHF
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Local market organizations have driven innovations in market reach approach – MO examples
The idea
• Provide cost efficient coverage to small customers
• Capitalize on existing traffic to dealers• Don’t loose advantages from direct sales
approach
ProShop (France)
• Remind customers to order on a regular base from Hilti
• Avoid existing customers to “slip” into becoming dormant customers
Outbound calling (HNA)
• Capitalize on preference of tradesmen in Italy to visit stores (getting together…)
• Get people into the store through personal relationships developed through TS
HC with territory (IT)
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The Hilti Business Model : Our base for sustainable, profitable growth
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 32www.hilti.com
Our value proposition consists of much more than product and price – trade example
Customer needsRelevant customer group
Large ↔ SmallHilti offer
Personal relationship, reliability, trust Direct sales force, "personal" TS
"Understands my business" Segmented specialists, innovations
Durable, performing tools High quality, high performance tools
Pride, acknowledgement Brand, red tool box, design of tools
Repair service Full service, fleet mgmt.
Availability, fast delivery of consumables 24h delivery, stock in HC/PS
Technical support for fastening solutions Application expertise, fast/flexible solutions
Consumables at market price level “No frills” consumables at market price
Convenient ordering Five channels: HC, CS, HC, PS, E-Bus.
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Pricing is an important topic for us
Hilti customers are willing to pay more due to our approach• Direct customer contact• Demos• Engineering support
But, there are increasing demands from customers regarding pricing• Pricing should be fair, based on potential• Prices should be consistent across channels• Large key accounts demand international pricing
In response, several Hilti pricing initiatives are on their way, e.g.• Structured pricing within MO’s• GAM (global account management)
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Brand strength empirically correlates with price premium and market share
Price premium
RSQ= 0.61
Brand strength
Market share
Source: European companies / GfK
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The Hilti brand is top of mind
Base: Total sample/ Responses in %
1): Which brands of fastening products and power tools do you know? (first and other mentions)
2): Have you ever heard of…?
4
4
11
12
17
27
1
13
22
18
18
36
31
12
23
19
57
67
59
65
46
39
88
77
79
26
7
12
5
3
1
1
Spontaneous first mention1) Spontaneous other mentionsAided awareness2) Unaware of brand
Competitor A
Competitor B
Competitor C
Competitor D
Competitor E
Competitor F
Competitor G
Competitor H
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 36www.hilti.com
The Hilti Business Model : Our base for sustainable, profitable growth
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 37www.hilti.com
Corporate culture is the driver of our success
Value-conforming management
behavior
employeesatisfaction and
morale
customer satisfaction and
loyalty
Commercial success:
Sustainable profitable
growth
drives
drives
drives
drives
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Marketing is not an isolated activity – it is about the entire business model
“Marketing is not a specialised business activity….it is the whole enterprise seen from the customer’s point of view.”
Peter Drucker, The Practice of Management, 1954
Trends and innovative Marketing in international industrial Markets | 20. April 2006 | K 39www.hilti.com
Summary: Key messages
Segmentation and a solid fact base are key
Product and channel innovation need to be based on (hidden) customer needs
Multi channel customers will buy more
The overall value proposition must be right – this does not necessarily mean low prices
A strong brand will help, but requires continuous investment
The right culture and motivated employees will make things happen
Marketing is about the entire business model