Business / Hunter Industries Company Analysis

Hunter Industries Company Analysis

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Autor:  anton  10 June 2011
Tags:  Hunter,  Industries,  Company,  Analysis
Words: 2306   |   Pages: 10
Views: 493

One of the most important questions anybody should ask when starting their own business, regardless of the industry, is what are my customer needs, wants and demands. This was no different for Edwin Hunter, founder of Hunter Industries, when he decided to start his own company. In 1981, Edwin Hunter, “retired” from Toro Inc. and started his own business in San Marcos, CA. With more than 30 years of experience in the irrigation industry and a great number of patents to his name, Mr. Edwin Hunter had a huge advantage over other start up companies.

The company we selected is Hunter Industries. They are located in San Marcos, CA and have manufacturing plants in Tijuana (Mexico), Cary (North Carolina) and offices all over the world. Hunter Industries, a family owned company, is a manufacturer of irrigation products. They consider themselves “the world’s leading manufacturer of irrigation equipment for the landscape and golf course industry” (website). The company has been in business for over 25 years and continues to be family operated. The company’s mission statement is “To be the Landscape professional’s first choice for irrigation products and services” (website). The company is headed by CEO, Richard E. Hunter, who joined his dad, brother and sister and in 1993 assumed complete control of the company. The company holds over 250 patents and over 40 trademarks. It is estimated that Hunter employs over 1,100 employees world-wide.

Hunter’s full array of products include rotors, sprays, valves, controllers, sensors etc… However, the most significant product line has been the rotor line, which put Hunter on the map in the irrigation industry. With the introduction of the PGP line, Hunter Industries became a pioneer in the industry. As a matter of fact, this new concept of a “pop-up gear-driven rotor revolutionized the irrigation industry” (website), to the point where all of their competitors began to imitate this product. Hunter’s contributions to the industry also came in the form of other products such as the sprays and controllers lines. On the controller line, Hunter introduced ACC controller, which “brings the convenience and versatility of modularity” to this type of advanced controller.

In its short life, Hunter Industries has had a significant number of accomplishments. Just to name a few:

- The first pop-up gear-driven rotor (PGP) is introduced to the market (1983)

- The PS spray head with arc nozzles proves to be a huge success in Europe (1986)

- Richard E. Hunter becomes CEO (1993),

- Three new product lines are launched PRO C, PRO SPRAY and PGV (2000)

- The wireless sensor line is expanded with the wireless rain/freeze (2004)

- The ET (Evapotranspiration) system is introduced (2006)

All of these events, along with many more, have propelled Hunter Industries to become a major player in the irrigation industry.

Industry:

The irrigation industry is made up of various segments. Some companies specialize in agriculture irrigation. While other manufactures, such as Hunter Industries, focus on the residential, industrial and golf segments. There are only a handful of companies in this segment of the industry namely Rainbird, Hunter Industries and Toro Inc. These competitors share a significant portion of the industry while a few other smaller companies make up a very small part of the industry. All of these three companies are vertically integrated and have a variety of irrigation products and services. These companies are a significant part of California’s manufacturing industry since all three of them have significant manufacturing facilities in the area.

This industry is promoted through an independent entity, the Irrigation Association. It was formed in 1949 and its membership is worldwide. All the members share a common vision “water conservation through efficient irrigation” (website). The main purpose of the Irrigation Association is to provide a voice “for the industry on public policy issues related to standards, conservation and water-use on local, national and international levels”, to act as a source, raise awareness, offer professional training and unite irrigation professionals. They organize and sponsor shows throughout the USA in an annual basis. Along with providing a voice for its members, the Irrigation Association has taken a proactive role in the many water conservation initiatives in various communities. They have helped promote initiatives such as the “SMART” irrigation technology to help alleviate the droughts in different communities.

As far as regulation in this industry, it has become a very important topic in this industry. The need for water conservation has driven the EPA to become more involved in this industry. Currently, there are a small number of which have enacted laws or ordinances. For example, Florida requires the use of rain sensors in commercial and public developments, according to Jeff Carowitz of Strategic Force Marketing. (Warde 2006) The EPA, in conjunction with the IA, has endorsed and is advocating the SMART program initiatives. These initiatives call for the expanded use smart controllers in all commercial and new housing developments. They are also “taking preliminary steps to establish a national, voluntary and market-based program to promote water-efficient products” (Irrigation.org 2007). This program will focus both on indoor use products as well as outdoor use products.

Marketing Concepts:

Hunter definitely understands consumers and the marketplace, which has allowed them to design an efficient customer driven marketing strategy. In order to design a customer-Driven marketing strategy that will succeed, the marketing manager must decide what customers they will serve and how to serve them best. As far as irrigation goes, Hunter has set out to market their products globally to various segments of their industry. With only a few companies supplying this huge market, it is possible to serve most customers, given that they need an automated irrigation system or service. If we were to divide the market into segments, we would find four major areas residential, industrial, agriculture, and golf. Hunter serves three of those major segments. Now, the areas that require irrigation in these segments are quite different because of size, but are similar in that the products and services used are somewhat similar. Hunter Industries has a wide-variety of products and services that can serve each of these market segments. Considering that, trees, plants, flowers and grass need water regularly but through different means, Hunter provides a product for each area to satisfy that need.

After deciding which customers they will serve, a company must then decide how it will serve those customers with a value proposition. In this case, Hunter has set out to innovate and produce high quality products, knowledgeable services and great customer service to satisfy consumer’s irrigation needs. They promise to give customers what they want by taking feedback and improving and developing products and services based on that.

The philosophy that Hunter follows to guide these marketing strategies is the marketing concept. The concept holds that in order to achieve organizational goals, the company must know the needs and wants of target markets to deliver the desired satisfaction better than any other competitor (Armstrong). This is exactly what Hunter intends to accomplish and has. As a customer-driven company, Hunter researches current customers in depth to learn about their desires such as offering products that limit maintenance and are easy to use. In turn, Hunter produces these new products and with the highest possible quality or improves existing products based on proposed ideas to achieve desired goals. In some cases, customers are invited to observe these processes to strengthen their relationship with them. Groups of existing customers are brought into San Marcos for a tour of the plant and for training. During these training sessions, customers are shown how the products are developed, made, and tested. These customers are also shown upcoming new products. Lastly, these customers are treated to various fun activities so they can have pleasant memories of the time spent at Hunter.

Hunter Industries has built lasting customer relationships by always putting the customer first. In the irrigation market, Hunter offers the highest customer perceived value by delivering the industry’s highest levels of quality, durability and ease of installation and service. Since the innovation of their signature pop-up gear-driven rotor, Hunter has been seen as a leader in both the general industry and amongst its competitors.

Customers often do not judge product values and costs accurately or objectively. They act on perceived value. Customers perceive most of this value through the fact that Hunter is an innovator. Customers believe in a product more if that company was innovator. This gives customers the feeling that the product is of high quality because they invented it. For example, when customers buy a PC, most are satisfied with Microsoft because they are the innovators of computer operating systems. So, with Hunter Industries being an innovator of irrigation products, having highly knowledgeable service technicians, lowest warranty costs and fewest callbacks, buyers of these products will perceive more overall value for their money than buyers of the competition. Hunter’s added value is also shown by the warranties of their products. Hunter stands behind its products 100% and offers a great warranty. They would replace any product if there are any quality issues. This type of warranty assures customers that the products they are buying from Hunter are of the highest quality possible. In addition to this great warranty, Hunter also provides a great deal of technical help. They have the resources necessary to send engineers or field technicians to any part of the world to help trouble- shoot or resolve any issues that might arise. Now this type of added-value to the products is not offered by many other companies.

Usually when it comes to satisfied customers of irrigation products, Hunter’s name can be heard often. Customers are usually highly satisfied because the product’s quality is not fully perceived until performance has taken place. Hunter products have a long life expectancy and provide high quality performance throughout that time. Hunter’s growth and leadership positions in product diversification, innovation and overall customer satisfaction come from listening to the customer above all else and keeping them satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which is why Hunter is the worlds’ leading manufacture of irrigation equipment for the last 20 years. Since Hunter is at the top of its competition, it does not need to worry about maximizing customer satisfaction through lower prices.

Depending on the nature of the target market, companies can build customer relationships at many levels. For instance, Hunter is actively involved in presenting educational programs at their facilities and at distributorships across the country. Hunter managers hold these seminars to help designers, installers and distributors stay current on irrigation practices, while promoting efficient landscape planning and efficient water use. Hunter has also implemented a specific marketing tool to develop stronger bonds with consumers. They have created a Preferred Contractor program, which provides a full range of relevant, value-added products and services. The program has been recently enhanced to provide even greater benefits such as rewards and business development support to its contractors in North America. The program also has three new levels of membership depending on annual purchases, which are Silver, Gold and Platinum in addition to the standard level. They also provide similar Alliance programs in selected international markets. (HunterIndustries.com)

Recommendations:

Here are some recommendations that we feel could help increase profits and expand their horizons. We feel that Hunter Industries could start making water faucets for everything from schools and businesses to individual homes and parks. We feel that since they are already providing a product that shoots water onto vegetation then why not produce a product that shoots water into sinks or peoples mouths. We feel that this could open up a whole new market for them and considering that they are an innovator in irrigation they could probably produce some high quality faucets and even improve existing designs. Faucets are used everywhere and with Hunter being such a huge name in the irrigation world they would have a good chance of capturing a chunk of the market. This could even lead to a line of high quality showerheads that provide an amazing release of water pressure.

We also feel that, since the main function of Hunter’s products is keeping the earth green, they should sponsor education programs in regions that need to raise awareness of rainforest preservation and how important it is to the eco-system. The villagers are cutting down the trees in the rainforest because it is there only profitable resource so we feel that Hunter could also donate money to these villages so that they could decrease the deforestation in these areas. This could also lead to a new slogan such as “Hunter, Keeping the Earth Green since ‘81”. This could create a positive image around the Hunter name and also raise some brand awareness amongst the public.

Another recommendation is that Hunter could think about selling sod along with their irrigation systems. It would make it much easier for customers to order everything they need to create a yard or field from one company than to get it from two separate ones. These would be ideal from a customer’s point of view which could greatly increase their profits. Sod is not that expensive to produce and could probably be sold at 75-100 percent above cost. Customers could have Hunter install an entire yard allowing them to expand their services, which also means more money. We feel that this could be a highly profitable idea and it could expand their market drastically.



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