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

Konkel, Meghanne B

Lay, Tiffanie N

Skinner, David

May 17, 2007

Table of Contents

EXECUTIVE SUMMARY 3

MAJOR RELEVANT ISSUES 3

COMPETITION 3

MARKET TRENDS 4

MARKET RESEARCH 4

MARKET MATURITY 4

WHOLESALERS 4

CENTRAL PROBLEM 5

IMPLICATIONS ARISING FROM THE PROBLEM 5

LOOSING MARKET 5

CUSTOMIZING PRODUCTS 5

SALESPEOPLE 6

ALTERNATIVE SOLUTIONS 6

CURRENT MARKET 6

CUSTOMER SERVICE 6

NEW WHOLESALERS 6

CHANGING STRATEGY 7

RECOMMENDED SOLUTION 7

Executive Summary

Quality Cutting Tools, Inc., (QCT) 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 product(s). QCT has been successful in the past when competing with OEM cutting tools along with imported foreign cutting tools.

Currently QCT uses National Mill Supplies, Inc. (NMS) as their main channel of distribution. NMS accounts for 90 percent of QCT’s sales. However, QCT and NMS are loosing sales due to a lack of product specialization and knowledge. The industry is becoming more complex and the market is maturing while other markets are emerging with new styles of tools.

However, 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 over other competitors in current and new specialized markets.

Ben has tried different approaches to resolve the current issue at hand. 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 if proper Operations Management was utilized.

There are also many new distribution channels that specialize in the cutting tool market. These new channels have shown to provide better customer service in the specialized cutting tool market. However, Ben is aware of complaints in regard to the customer service his distributors are providing for his current patron(s). Unfortunately, Ben took these complaints lightly and is now unsure of the future of QCT.

QCT’s strategy will be developed around the customer service portion of the business. Their distributors will need to provide better overall technical support and build better relationships with their customers. This will help QCT capture new customers in the current mature market by raising their competitive advantage in customer service. This will lead QCT to discovering new wholesalers while developing new product(s) as they are in the market maturity stage of business. This should inevitably make QCT more competitive in a newly transforming market and raise profitability of the company which is ultimately Ben’s goal.

Major Relevant Issues

Competition

Despite achieving sales of only $5.2 million in 2001, small by industry standards, QCT is recognized as a producer of top-quality cutting tools. However,