Dominion Motors Case

Dominion Motors Study questions:

1. What do we really know about this situation?

We are aware that DMC is fearing a potential loss in the market share for oil pumping motors in Canada post a test done by Hamilton Company, which promotes DMC’s competitors as its supplier of motors.

1. How serious is the situation facing Hamilton Oil Company?  Is it just a 'brush fire' or an important problem?  Is it possibly symptomatic of a larger problem facing DMC?

The situation facing the oil company is more self-imposed than unexpected. It is a brush fire for Hamilton but not for DMC. DMC faces a potential major loss in market share as its competitors were being endorsed by the largest oil company in Canada.

For Hamilton, it just doesn’t matter who it has a tie up with and who they promote. Yet at the same time if another customer like Hamilton carries out its own analysis in the future and the results are strikingly different. DMC’s executives pointed out that all 7 and a half HP motors had starting torque more than 80 pounds-feet and hence should be satisfactory as 70 pounds per feet was capable of ‘breaking’ a pump in cold weather conditions. Bridges was of the assumption that since starting torque was of paramount importance in oil pumping motor applications, he should get as much of it as possible. Hamilton’s market reputation can be severely hampered and it may not be in a dictating and influential position post that.

DMC was long overdue of this apparent fear of losing their market share due to several reasons:

1. It is a sales oriented company and not sales oriented. Even before and now more so after Hamilton’s test DMC was majorly concerned about its market position and share in the market.
2. It doesn’t have a clear mandate when it comes its advertising strategy. They used trade journals as a measure of influence. Its promotional program consisted of catalogs which as opposed to pamphlets were complex and accompanied long sales arguments. They were also difficult to revise but DMC thought of it as more cost efficient than pamphlets as motor designs and specifications seldom changed, until now where DMC is looking to do that as one of its solutions to the Hamilton test result problem.

3. What is your evaluation of the 4 alternatives being considered?  How profitable is each of them?  Are there any other options that are not being considered, but should be?

4. How well does DMC seem to understand the customer decision making process?   How many different customer groups are there making such decisions?

5. What will the production people want to say about this problem?  the finance people?  the engineers?  the public relations people?