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New Directions: Building Out A Market Sensitive Product Line

Published: 6/15/2015 Author: Stephen Metzger, Managing Director, Small Vehicle Resource, LLC Category: Marketing
Developing a product line in the small, task-oriented vehicle (STOV) industry is no small undertaking, which is why companies hire product development managers. Product development must be coordinated with the marketing division of the company, which has its own set of managers.
By its very nature of the STOV industry, developing a winning product line that is sensitive and quickly reactive to the market is a complex undertaking because of the wide diversity of end-user requirements. In this article, product development strategies across traditional powersports and golf manufacturers is discussed, and then specific attention is given to Cub Cadet's emergence as a multi-model, multimodal UTV company.
In broad terms, we can characterize product line development in two ways, and these categories are actually more descriptive of product development strategies than simply year-to-year changes in particular models.
Product development as a series of annual slate of new and upgraded products
Companies that consistently renew and upgrade their product lines play to a market that expects these changes usually on an annual basis. The prime example of this strategy can be found in the powersports industry. The recreational UTVs that hit the market from Polaris Industries, BRP, and Arctic Cat do so on an annual basis, with great fanfare and an adoring demographic of young riders.
To a slightly lesser extent, work-oriented UTVs provide a further example of this product development strategy. These vehicles are an extension of recreational UTVs, with somewhat less radical suspension systems and usually with a lower top speed and more work-adaptable drive train ratios. These models have more four seaters in the lineup and often have a crew version seating six.
Product development as a generational process
For some companies changes in the model lineup proceed at much less hectic pace and are usually seen as opening up a new era of vehicles that the market can count on to be around for at least a number of years. This strategy is typified by traditional golf car manufacturers. Several examples include E-Z-GO's move to AC electric power and Yamaha's introduction of electronic fuel injection, these introductions triggering similar adaptations between the two companies and Club Car adopting both.
Product line changes under this philosophy play into a significantly different market arena, where the sporting element, so prevalent in powersports, is missing. (Yes, including golf cars. Find an advertisement for a golf course that touts its new, different, and exciting golf car.) In other words, functionality set to certain accepted thresholds is what is expected. If a manufacturer can get to those thresholds with a more efficient AC and EFI drivetrains, so much the better.
Cub Cadet's product development as focused models and clear differentiation
Cub Cadet, the brand, is far better known for lawn mowers, which the company sells into both consumer and commercial markets, than for UTVs. Generally speaking, with regard to mowers, the consumer market encompasses suburbia and estate owners (two acres or more of property to keep up), while the commercial market is directed toward colleges and universities and other campus settings, including business complexes and gated communities. All-in-all the market appears more consumer than commercial.
In its move into the UTV market arena, Cub Cadet's product strategy combines conservatism and a sort of stealth. The company now has two products lines, on which it will probably build for the future:
  • A solid work vehicle, the Volunteer; and
  • A crossover, work/recreation vehicle, the Challenger line, coming in lower and higher powered models (dubbed the 500 and 700).
In speaking recently with Jeffrey Salamon, Director Marketing and Sales, Jeff made four significant points concerning Cub Cadet's current UTV product line.
First, there is a clear differentiation between the Volunteer and the Challenger product lines. The former is designed as a heavy duty work vehicle—lower speed (tops out at 35 m.p.h. and comes in a diesel version—while the latter is designed for recreation as well as work—a true crossover.
Second, Cub Cadet will market these vehicles, particularly the Challenger, through its established dealer network;
Third, given a well-engineered product, market share will be built on the same demographic that now comprises the company's mainstream market for its lawnmower products, the estate owner and rancher/farmer. This will build on the company's well-established customer base and a dealer network with a proven quality reputation.
Fourth, the Challenger seriously tweaks the cost/benefit trade-off in that it comes with a wide range of standard features that are often adds-ons in other brands, which can significantly bump-up the price.
Challenger performance at same price point range beats similar Polaris models
A final point could also be made which is that both model lines come in at under $10,000, which is important to the Challenger because in the $7,500-$10,000 price range it is in competition with the Polaris Ranger 400 and 500. While the prices are similar, the Challenger 700 is a step up in power, with a displacement of 686 cc vs. 455 cc and 498 cc for the Polaris Ranger 400 and 500, respectively. The Challenger is also well-designed to compete with various Cushman and Club Car XRT models.
In summary, Cub Cadet's product strategy may comprise a new business model for the industry, which is conservative in pricing, placing well-differentiated choices before the market, and initial entry into an established market base. "Stealth" is also an operative term in that its vehicles, particularly the Challenger, will quietly move into other non-traditional markets as time goes on.
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