A recent Council of Supply Chain Management Professionals meeting featured an executive from Caterpillar, largely considered the world's leading manufacturer of construction and mining equipment.
The executive discussed the capabilities of the firm regarding tracking the carriers or transportation vendors who facilitate the movement of parts needed for manufacturing as well as finished goods. The company utilizes a solution from GT Nexus which provides end-to-end visibility of its carriers across different shipping modes including air transportation, ocean, inland waterways, and over-the-road trucking. The GT Nexus technology solution tracks on-time performance of the carriers within each shipping mode and assists Caterpillar in determining the cost-effectiveness of specific carrier vendors as well as shipping modes. Caterpillar utilizes the information to assist them in their decision-making as to when to utilize different modes of transportation (e.g., air freight versus ocean) as well as decisions within a mode (e.g., one-day air versus two- or three-day air). In addition, Caterpillar engages in customer analysis research to determine consumers' sensitivity to price as well as the importance of timely delivery. Additional insight regarding customer needs aids Caterpillar in their judgments about pricing and delivery schedules for parts and equipment. Caterpillar's investment in the technology solution as well as customer insights has helped the company achieve its revenue and profitability goals.
Which variable of the marketing mix is most impacted by Caterpillar's use of the GT Nexus solution?
a. product variable
b. pricing variable
c. distribution variable
d. promotion variable
Answer: c. distribution variable
Which environmental factor did Caterpillar leverage to implement a solution to track shippers and study the on-time delivery rates for each transportation vendor?
a. economic
b. competitive
c. legal and regulatory
d. technological
Answer: d. technological
Based on the information provided in the Scenario regarding Caterpillar, which orientation would best describe their approach to marketing?
a. production orientation
b. sales orientation
c. competitive orientation
d. market orientation
Answer: d. market orientation