Marketing Case Analysis

MKTG 101 – Principles of Marketing

Group 6

Section 5

Professor Bruce Wilson

Case 24

Quality Cutting Tools, Inc.

Group Case 2

Prepared by:

Vaccarezza, Andrew M

Jiang, Benson X

Longcrier, Emily N

Benson, Brooke E

Kalachik, Tatyana V

Konkel, Meghanne B

Lay, Tiffanie N

Skinner, David

May 17, 2007

TABLE OF CONTENTS

EXECUTIVE SUMMARY 3

COMPANY OVERVIEW 3

PROBLEMS AT QCT 3

SOLUTIONS 3

MAJOR RELEVANT ISSUES 4

COMPETITION 4

MARKET TRENDS 4

MARKET RESEARCH 4

MARKET MATURITY 4

WHOLESALERS 5

CENTRAL PROBLEM 5

IMPLICATIONS ARISING FROM THE PROBLEM 5

LOSING MARKET 5

CUSTOMIZING PRODUCTS 5

SALESPEOPLE 6

ALTERNATIVE SOLUTIONS 6

CURRENT MARKET 6

CUSTOMER SERVICE 6

NEW WHOLESALERS 7

CHANGING STRATEGY 7

RECOMMENDED SOLUTION 7

Executive Summary

Company Overview

Quality Cutting Tools, Inc. is a successful manufacturer of industrial cutting tools in an industry where every company is intensely devoted and competitive. The cutting tools provided by QCT have been labeled as top-quality products and QCT has been successful in the past when competing with OEM cutting tools as well as with imported foreign cutting tools.

Currently, QCT uses National Mill Supplies, Inc. (NMS) as their main channel of distribution which accounts for 90 percent of QCT’s sales. However, QCT and NMS are losing sales due to a lack of product specialization and knowledge in the NMS workforce.

Problems at QCT

With the industry introducing new products and means of conducting business, QCT is faced with several problems. Customer service is failing and the thought of losing revenue is raising concerns for President Ben Colavito. Inevitably, QCT will have to find strategies to raise their competitive advantage in current and new specialized markets.

Ben has tried different approaches to study the emerging specialized market. One of these approaches was using a research company to gather information regarding the new market of specialized cutting tools. The forecast showed a promising future in the new specialized cutting tool market.

Many new distribution channels specialize in the cutting tool market. These new distribution channels provide better customer service. Ben is receiving complaints about the customer service his distributors are providing. Unfortunately, Ben takes these complaints lightly and is unsure of the future of QCT.

Solutions

QCT’s strategy should be developed around two different markets for two different types of cutting tools. Their distributors will need to provide better overall technical support and build better relationships with their customers. This is only possible if customized cutting tools are separated from the general cutting tools market. This will help QCT to keep current customers in the current mature market as well as capture new customers in the newly developed customized cutting tool market. This should raise the competitive advantage and improve customer service.

This will lead QCT to discovering new wholesalers while developing new products as they move to the market maturity stage of business. This should inevitably make QCT more competitive in a newly transforming