Strengthening the Cat® Brand BUILT FOR IT™ Dealer FAQs Background Q. What is BUILT FOR IT™? BUILT FOR IT is the name of a centralized global Cat® brand communications platform, which we are going to use on a global, regional and local basis. At its core, it is the external manifestation of our internal Cat brand promise (“A champion for your enduring success”). The BUILT FOR IT platform allows us to tie-in with industry, product, dealer and other marketing communication sources. It will replace other business, product and industry groups’ individual marketing platforms and campaigns, i.e., “Generations Ahead,” “All day. Every day.” and “Wherever there’s mining, we’re there.” Q. Why are we adopting a global, centralized strategy? Our leadership is committed to driving consistency in how we talk about and leverage the Cat brand. BUILT FOR IT communication goals support that strategy via a singular, external-facing brand message that relays what the Cat brand represents and the value it brings to customers. It will also give us an efficient and cost-effective means for taking a global integrated marketing communications approach. By consistently applying its new customer-centric based messaging around the globe, we can save the costs associated with creating multiple campaign themes. That tends to confuse our prospects and customers because it fragments Cat brand messaging, which is why we’re eliminating the other platforms and campaigns. Q. So what does it all mean? Adopting our BUILT FOR IT communications platform means we’re going to promote the Cat brand, not just Cat branded products, with a centralized budget for brand building. It also means: We’re going to have consistency in our external messages. They will be customer-focused, highlighting the exceptional team that supports the Cat brand. There will also be freedom within its strong framework. And, within that freedom, there will be governance including measurement and accountability. We’re going to align our marketing spend with our market opportunity, and North America will not be our biggest or only focus. We will continue to engage Caterpillar, dealer, and our suppliers’ employees to understand and become advocates for the Cat brand through their marketing communications targeted at external audiences throughout the world. Q. What benefits will we realize from implementing BUILT FOR IT? There are a host of benefits to be gained from successfully executing BUILT FOR IT. These include benefits for Caterpillar, dealers, stockholders and other stakeholders including, most importantly, our customers. To name a few, through the platform’s initiatives, we will: Eliminate the complexity typically required to develop marketing communications, resulting in smarter allocation of marketing investments, at the same time increasing the Cat brand’s impact in the marketplace. Align around a single global message—for the first time in our company’s history. Continue to increase our brand value, which according to Interbrand has increased 13 percent from the previous year, with a value of $6.3 billion. Caterpillar: Confidential Green Overall, we will introduce the Cat brand to people who don’t know us well or understand our value proposition, influencing the sales cycle and producing added revenue in the process. Q. How will this change the way we market the Cat brand? For most of our history, Cat brand marketing has been tied to a particular product, and the areas of the world with the lowest brand awareness have not necessarily received the largest investment in marketing. The biggest change will be an investment in Cat brand level promotion, directly tied to affect the areas with the largest business opportunity. Q. Why do we need both the “A champion for your enduring success” and BUILT FOR IT themes? “A champion for your enduring success” is our Cat brand promise revolving around the promise of total life cycle value and helping customers succeed, and that will never change. We use it internally only, which means it isn’t a campaign or a tagline for external use. Whereas, BUILT FOR IT is the customer-facing or external manifestation of our brand promise. It is the platform and theme line for how we tell the world, in particular our prospects and customers, what our brand stands for. Burning Platform Q. What is driving the need for this new platform? The Leadership Summit held in February 2012 revealed several critical gaps in our previous Cat brand strategy. The following three gaps alone make it clear it is critical to revitalize Caterpillar’s most visible customer-facing brand: 1. Shorter employee tenures have led to a growing lack of understanding about what the Cat brand stands for; causing us to fall short on meeting customer expectations—eroding loyalty. 2. Competitors actively and consistently claim they also own Cat brand attributes of quality, reliability and durability; eliminating our long-standing key differentiators in Cat messaging. 3. We spend nearly 80 percent of our marketing budget in North America; creating a lag in our brand awareness and PINS position in other markets, in particular Brazil, China, India, Indonesia and Russia, where forecasts indicate over half of our new business opportunities exist. Q. What are the top reasons for adopting BUILT FOR IT? 1. Competition is increasing and getting stronger. 2. Enterprise Brand Analysis (EBA) tells us we have high awareness, but lack familiarity for the Cat value proposition. 3. Marketing budgets are tightening across the enterprise. 4. Consistent marketing messaging is absent at the brand level, and fractured at the industry, product and dealer level. 5. Many dealers have requested a common positioning to rally around. Caterpillar: Confidential Green Q. Why do this now, when the Cat brand is already ranked by Interbrand as one of the strongest brands in the world? It’s true we have a very strong brand, and we’re well-known in many parts of the world, yet we’re lesser known in others. We’re also losing market share to strong competitors, including Deere. Our goal is to solidify and grow our brand in every corner of the world—and do it now. Q. How do we know BUILT FOR IT is going to impact the brand in a larger way? Is there research or something that tells us that? It is extremely difficult, if not impossible, to determine in advance exactly what impact BUILT FOR IT will ultimately produce, especially when it will take years for the platform to reach maturity. So we do indeed rely on research to solidify our views on the level of impact this transition to a centralized communication platform will mean for the enterprise. A good deal of our research involved intensive study of the best practices of other global brands. Companies like Nike, IBM and SAP that have achieved tremendous results by centralizing their marketing communication platforms. And we intend to reap those same types of benefits by investing in our new platform. Investment Q. Where were brand building dollars spent before the platform? In the past, we weren’t as strategically driven to link our brand marketing “spend” to “dollar opportunity.” So we’ve been spending approximately 80 percent of our marketing budget in North America. That investment focus has made us well-known in North America, and we enjoy an enviable reputation there. We also gained a solid group of brand loyalists, meaning there are advocates for our brand throughout the continent. Q. What will change? What markets will we target now? We now need to extend our focus, promotional efforts and budget to other areas of the globe where we’re not as well-known or our value proposition isn’t understood. We’ve stratified our efforts based on opportunity, and that’s why going forward with the platform we’ll focus on Brazil, China, India, Indonesia and Russia to start. We’ll also execute online promotions in English to target additional areas, including North America Canada. Q. What have we invested in so far? To date, we’ve been focusing our budget on research; measuring the performance of the Cat brand through our world-class brand analysis tool; creating look-and-feel concepts to reinvigorate our communications and refreshing the tone of the brand; and on developing the platform that will become the external demonstration of our internal brand promise. Q. How does this campaign result in smarter allocation of marketing investments? With one common and centralized global platform, the time and money spent creating and developing individual campaigns will be saved. Savings can be used more effectively toward creating and deploying deliverables that get brand messages to the targeted audience. In addition, individual campaigns had to work hard to capture customer mind share and attention. Now, using a single voice with BUILT FOR IT will create synergies that result in higher recognition of a common message for a greater overall impact in the marketplace. Q. Will there be co-op dollars for this campaign? At this time, there is no plan to provide co-op dollars. Caterpillar: Confidential Green Enterprise Engagement Q. What do Cat dealers think about BUILT FOR IT? Are they aligned with this positioning? We have received feedback from global dealers regarding the fragmentation of our industry and product messaging. Many dealers are beginning to welcome this consistent message and react positively to this campaign just as they did regarding our internal brand promise. Q. Are you providing assistance to help make changes to materials already prepared? Yes, Global Brand Marketing has been and will continue to meet with groups to provide consultative services and also discuss how they can integrate existing messaging. Selection of BUILT FOR IT Q. What made you decide to go with BUILT FOR IT as the theme? BUILT FOR IT is an excellent foundation to express our recommitment to what the Cat brand stands for to the public — in particular to customers. It’s a simple and succinct communications platform which is flexible enough to accommodate our wide variety of global communications needs, and it tested well with potential customers. The BUILT FOR IT positioning document offers more insight into why the platform aligns with other Cat brand attributes. It references Caterpillar as a company that resides on a solid foundation that’s built on heritage, pride, innovation and trust. These attributes apply to our entire Cat brand—our industries, products, services and our dealer network. So our customers can build on a company that’s BUILT FOR IT. Q. BUILT FOR IT seems like a good match for our equipment line, but what about our other products like engines, generator sets and parts? At first glance, it’s understandable why BUILT FOR IT from a literal perspective makes perfect sense for our construction equipment, our “building” products if you will. Taking a less literal view also makes it apparent that the theme line can resonate quite well across the full spectrum of Cat offerings and the enterprise itself. For example, when something is “built on a solid foundation, it is built to last.” That sentiment applies to our entire Cat product, service and technology portfolio. Creative Execution of BUILT FOR IT Q. How would you describe the creative approach, essentially the “look and feel,” of BUILT FOR IT campaign materials? The creative platform uses a consistent design approach. There’s a heavy reliance on the two colors Cat owns: yellow and black. We use these powerful colors predominantly in the look. We’re also using dynamic primary photography, with two complementary images in an ad. Since customers are at the heart of our brand promise, we feature them in no-frills, roll-up-your-sleeves settings, where they’re focused on what really matters—getting the job done. Overall, we describe the look as differentiated, powerful, gritty and edgy—true to the nature of our business. Caterpillar: Confidential Green Q. How is the BUILT FOR IT campaign consistent with the Global Advertising Framework (GAF) rolled out in 2012? GAF standards rolled out in 2012 are still relevant. We have added additional flexibility to enable us to truly differentiate the Cat brand within marketplaces that are not as familiar with us. There are strong common elements that ensure this Cat family of advertising consistently reflects the Cat brand. Q. How will you localize the ads? The look described in the previous question will be the basis of our global Cat brand campaign. But our geography-centric ads won’t simply be English translated versions. We’ll be using words and imagery designed to resonate with each geographic target. The ads will be created “in country,” and reviewed by teams in these regions. Q. Will ads for specific industries and/or product groups differ? We designed the platform to allow us to tie-in with industry, product and also dealer marketing. Our theme line BUILT FOR IT will be common across all our marketing, however, industry and product ad content will be focused on specific customer needs. Q. How will ads focused on Cat dealers align with this communications platform? We believe BUILT FOR IT messaging and imagery have a strong and determined tone, and is flexible enough to cast a spotlight on our world-class dealers as well as their sales and service support. Q. Were the campaign look and copy tested? If so, how? Yes. We tested the appeal of the look and reaction to the BUILT FOR IT position in targeted markets. To ensure localization of the campaign works, we used various locations including Brazil, Indonesia, China, Russia, USA, Germany, France, Dubai and Turkey. The results were positive and showed that more than 80% of the respondents agreed the BUILT FOR IT message accurately depicted the Cat brand. Brand Portfolio Q. Can dealers use BUILT FOR IT in the marketing of other brands they support (i.e. joint ventures)? The BUILT FOR IT platform can be used in conjunction with other brands as long as Cat or Caterpillar is the leading product and/or brand in the message and the dealer lock up is present and prominent. Q. What if a dealer is marketing themselves as a company? BUILT FOR IT should only be used by a dealer when they are also displaying their dealer lockup. If no lockup is present and noticeable the BUILT FOR IT platform should not be used. Deployment and Governance Q. How are you going to track the impact? We will track though the world class Enterprise Brand Analysis tool that measures sales funnel progress and how we live up to our Brand Promise: Dedicated, Strong, Respectful, Authentic, Unmatched Team and Culture. Caterpillar: Confidential Green Q. What training will be available to educate dealers on BUILT FOR IT? Training for both dealers and the enterprise is slated to begin in third quarter of 2013. Additionally information and resources can be found on brand.cat./commit Q. What about BUILT FOR IT training for our creative vendors/agencies? We will train full-service and specialty creative agencies and hold them accountable for appropriately supporting the BUILT FOR IT platform in their work. They will also be formally reviewed on a regular basis to ensure adherence to the platform. Q. Are guidelines on how to use BUILT FOR IT available? Yes. The initial BUILT FOR IT Playbook, which was distributed in April, includes the communication guidelines for the industry groups, product groups, parts groups, dealers, etc. This vital tool includes content and design samples, tactical do’s and don’ts for communicators, and more. This information can be accessed on brand.cat.com. A second version of the Playbook incorporating key learnings will be distributed in October. Target Audience Q. Why launch the campaign in Brazil, China, India, Indonesia and Russia first? The different countries were carefully selected as initial targets based on PINS and POPS opportunities. For example, China presents phenomenal opportunities for increasing PINS and POPS. Yet, right now we’re not capturing the market share we should in China, because we’re not the first supplier option that comes to mind. We need to allocate far more marketing dollars to become well-known and the preferred supplier for meeting their equipment needs. We intend to accomplish that through the BUILT FOR IT platform. Keep in mind, however, that while we have primary geographic targets identified, the new brand platform is global— and will be implemented around the world. Q. Why did you decide to target prospects who don’t understand our value proposition? The answer is in the question really. They don’t know us at all or don’t know us well, and we want to introduce them to the Cat brand. The specific geographic targets were selected based on PINS and POPS opportunities. They’re a match with our long-term business plan. In short, we can’t make inroads in those countries if they know little or nothing about the Cat brand value proposition. Q. How can one centralized strategy “speak to” and resonate with every market? BUILT FOR IT is the overarching platform for issuing consistent communications about the brand. There are some elements of the platform that will and must remain constant. For example: consistent use of the theme line. Beyond the mandatory constants spelled out in the BUILT FOR IT Playbook for proper copy and design use, we’re well aware that cultural and geographic nuances will affect certain elements of our messaging in different markets; which is why we are transcreating the theme line in other markets. Guidelines have been developed with built-in flexibility, which not only allows for, but encourages the use of content, images, etc. that are highly targeted and relevant to a respective market. The BUILT FOR IT graphic elements (black and white photography and yellow duotone), are additions to the updated GAF. Caterpillar: Confidential Green Q. What is the process for ensuring we make a global message local? The essence of the Cat brand is universal even though the literal interpretation may differ by region. So we will be working with all of the regions and industries to ensure messaging aligns at the local level. In key regions and industries, Certified Brand Advocates (CBAs) have been trained and will serve as local resources. The CBAs will help ensure our customer value messaging and images look and feel authentic to each respective region. We have a newly formed (2012) Global Brand Marketing Business Table to provide guidance. We’ve also gathered input from Caterpillar employees and dealers working in the key areas. In addition, we’ll capitalize on the expertise of our global ad agency, Ogilvy & Mather. Localizing the campaign will be an evolving process as we continue to reach out to more and more markets with the BUILT FOR IT platform. Timeframes Q. Why are we executing the external Cat brand strategy now? As we rolled out our Cat brand strategy, we determined it was best to use an “inside out” approach to revitalize our brand strategy. That means we intentionally began by informing employees about the internal component of the strategy, “A champion for your enduring success.” We worked intensely for over six months to engage them in seeing their role in its essence as brand advocates devoted to helping our customers succeed. Their understanding, acceptance and enthusiasm for taking on the role of brand advocates for our customers is successful. In fact, we have made so much progress in employee engagement that it has allowed us to shift our primary focus to our outside efforts, while we continue to spread the internal message to reach all enterprise employees. Q. When will existing campaigns go away? Group specific campaigns such as: “Generations Ahead,” “All day. Every day” and “Wherever there’s mining we’re there,” will be integrated into the BUILT FOR IT platform. All existing campaigns will transition to the new platform by January 2014. Note: To assist, Global Brand Marketing will consult with individual groups to solidify a plan for retirement of their themes and help them through the migration to BUILT FOR IT. It will take some time, because it’s not as simple as pulling a switch to “turn off” these campaigns. Overall, there is wide understanding by industry and other groups that there are advantages for all in presenting one, common global message. Q. What is the timeline for dealer implementation? It is our intent that the BUILT FOR IT campaign will be Cat brand’s globally pervasive marketing message from Caterpillar and Cat dealers by mid-year 2014. We will formally roll this out to all dealers during the 3rd quarter of this year with targeted training available to accommodate all countries and time zones. We strongly encourage dealers to join us in our journey to align around one consistent message for the first time in our history to strengthen the Cat brand. Caterpillar: Confidential Green Q. What’s the lifespan of this effort? Our BUILT FOR IT campaign will run a minimum of five years, and quite likely longer. We need to give it time to gain awareness of and preference for the Cat brand throughout the world. It will help us introduce and educate markets about the Cat brand, so they understand the benefits and the value our products and engines services bring in aiding their success. This approach is not uncommon for other stellar brands, which maintain the same brand messaging taglines for decades. Nike is a great example, with “Just Do It” as their highly successful communications platform since 1988. Your Role and Resources Q. How does this affect me? Any time you interact with a Cat customer, dealer, supplier or even fellow Caterpillar employee—you’re representing the Cat brand. Every action we take affects and reflects in some way on the brand. Q. Where can I learn more about BUILT FOR IT online? You’ll find the most up-to-date information by visiting brand.cat.com/commit. On the site there are links to all kinds of information about the new external brand strategy, BUILT FOR IT. You’ll want to return often, since we will be adding information on a regular basis as we move forward. Q. What can I do to support BUILT FOR IT? Going forward, we want you to align your work with the brand strategy’s ultimate goal—helping our customers succeed. You can get started now by thinking in terms of how you personally can meet customer expectations through your work by: Staying current and engaged, always looking for new information about BUILT FOR IT online Communicating your thoughts for improvement and opportunities Attend training Q. What resources are available for learning more about BUILT FOR IT? If you would like a brand consultant to talk with your team or require specialized materials, contact Jaclyn Fones in Global Brand Marketing. For a list of contacts and tools, a schedule of training and locations, go to brand.cat.com/commit. Caterpillar: Confidential Green