Marketing 18th Edition by William Pride,Ferrell

Exercise 2

Eaton Corporation: Experts at Targeting Different Markets
Eaton Corporation is a power management company based in Cleveland, Ohio. Founded by Joseph Eaton in 1911, this $21.8 billion company originally manufactured truck axels. Today, the company produces more than 900,000 different industrial components and employs 103,000 people globally. It sells products in 175 countries. Eaton's goods and services include electrical components and systems for power quality, distribution, and control; hydraulics components, systems, and services for industrial and mobile equipment; aerospace fuel, hydraulics, and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy, and safety. Eaton Corporation has also been one of the most profitable companies, with its stock price surpassing the average of the S P 500 for the past decade. It has been ranked by Fortune magazine as number six in industrial and farm equipment.
Eaton supplies products that help customers reduce their energy consumption, including monitoring software, power management systems, high-efficiency transformers, hydraulic systems, and truck transmissions. These products help customers to increase the energy efficiency of buildings, vehicles, and machinery; conserve natural resources; shrink their carbon footprints; and reduce their environmental impact. Although the company sells mostly to industrial and government users, it also sells products to consumers for residences and recreation. Eaton's global presence is extensive. The firm is successfully facing political, environmental, and cultural challenges to create a global name for itself. To help in this endeavor, Eaton uses social media sites including Facebook, Twitter, and YouTube to connect with users and spread awareness about its products.
Business Markets
Eaton's businesses consist of two major sectors: electrical and industrial. Its industrial sector is further split up into hydraulic, aerospace, filtration, and vehicle groups. Eaton's vast array of products targets producer, reseller, and government markets. For instance, in the aerospace industry, Eaton offer components such as fuel and inerting systems, hydraulic systems, and motion control for aircraft. It offers electrical systems, hydraulic systems, fueling, and clutches and brakes for military marine vessels. Eaton also uses many intermediaries such as distributors and retailers to sell products to businesses. Because Eaton's business products entail more risk of purchase, the company employs salespeople and has customer support available for its many different product lines. Eaton also has support staff to handle customer emergencies that happen after hours.
Eaton does not limit its industrial products to large businesses only. It also targets smaller businesses that have need of its products. For instance, in one customer transaction, Eaton provided filter bags to help a family-owned mushroom farm improve its filtration system-which was estimated to increase productivity and led to a savings of $22,000 a year. Eaton's Cooper Lighting division also helped a privately-held California firm improve the efficiency of its outdoor lighting system. By installing more energy efficient lighting, Eaton helped the firm save 50 percent on energy costs.
Eaton markets to its business customers in a variety of ways. It uses digital media such as its website to describe products, and also has a Success Stories page that describes how Eaton technologies improved their customers' operations. It has a sales force to market its products to business customers and resellers. It also develops advertising campaigns to reach its audience. One of its campaigns even won the Eloqua Markie award for Most Creative Marketing Campaign. In its campaign titled "Things Have Changed," Eaton targeted the IT industry by marketing its expertise in the IT and data center solutions. The campaign used the desk toys of an IT manager to get the message across. The campaign also used social media, direct marketing, and event promotions to enhance its advertising campaign. Eaton clearly demonstrates a strong focus on business and government users of its products.
Consumer Markets
While the majority of Eaton's products are sold to business markets, some of its products also target end-use consumers. For instance, Eaton markets its Golf Pride ® golf club grip to golfers for both club manufacturers and professional/amateur golfers. These products are found at Dick's Sporting Goods stores and other locations. Eaton also sells residential products including solar devices, circuit breakers, spa panels, and in-ceiling speakers. To help consumers learn about the quality of its products, Eaton offers a virtual tour of a house that demonstrates how its products can be used throughout the home.
Most of Eaton's products represent high-involvement products for consumers due to the expense of the product and the costs of installation. Therefore, Eaton must take steps to emphasize the high quality and significance of its products and, if possible, lower the risks of purchase. Eaton realizes that like its business market, customers are more interested in the functionality of its products. For instance, a home owner is more likely to be concerned with whether a circuit breaker works correctly than how it looks. Eaton puts a major emphasis on service to reassure its customers that the company puts their needs first. It emphasizes on its website that it delivers service 24/7 depending on the customers' needs. Eaton also offers warranties to reassure customers that defects in the product will be addressed. For instance, it offers a 12-month standard warranty on DC products.
Finally, Eaton continually solicits customer feedback in order to assess customer satisfaction. One of the most important ways the company gets customer opinions is through the Customer Relationship Review (CRR). Each year, Eaton conducts more than 1,000 in-person interviews of customers, including at least one person from every major account. Eaton then generates and distributes an Executive Summary that summarizes the company's strengths and weaknesses. In addition, Eaton also creates several smaller and more focused reports for employee use. Eaton considers both business and consumer customers to be important stakeholders.
Global Business and Social Media
Eaton has had a global presence since 1946, when it acquired a minority interest in U.K. firm Hobourn-Eaton Manufacturing Company Limited. Today its global headquarters are located in Dublin, Ireland. Eaton is a truly multinational company with 55 percent of its revenues coming from outside the United States and 24 percent from developing countries. Eaton sees opportunities for massive growth in the Asia-Pacific region and has 18 manufacturing centers in China. However, with these opportunities come challenges that Eaton must face. For instance, China is experiencing increases in safety laws, land prices and taxes, and minimum wage laws. Eaton is choosing to locate more facilities in China to increase its localization so it can handle these challenges more effectively.
Additionally, both the Chinese and Indian governments have set sustainability goals for their countries, meaning that companies will have to increase their sustainability and sale of eco-friendly products. By investing in energy efficient operations and selling more sustainable products, Eaton has been meeting these environmental challenges head on.
Another major challenge is ethics and compliance. The more Eaton expands into other countries, the harder it will be to ensure that its facilities, suppliers, and partners are adhering to ethical conduct. By creating more of a localized presence in places like China, Eaton has the ability to increase managerial oversight and emphasize ethical expectations. Additionally, the firm has a Global Ethics office that encourages global employees to report questions or concerns. Non- English-speaking employees can write e-mails and letters to the Global Ethics office in their native language, and Eaton will translate them.
Finally, Eaton has found that an effective way of communicating with global customers is through the use of digital media. In addition to its highly informational website, Eaton also offers online catalogs and e-newsletters that can be easily distributed with just a click of a button. Eaton maintains an active presence on Facebook, Twitter, and YouTube, allowing the firm to answer customer questions and provide updates. Eaton maintains different product categories on these social media sites to address different target markets. For instance, it has pages that focus on electrical, vehicle, and filtration products. YouTube videos help to demonstrate how Eaton products work, acting as a sort of sales promotional tool.
Eaton has a company-wide commitment to serving the needs of business, consumer, and global markets. It uses different marketing approaches to target its various markets, including advertising and digital media campaigns. Eaton's strong understanding of its customer markets is the key to its reputation and global success.
Questions for Discussion
Describe ways that Eaton is addressing global challenges.