INDIAN INSTITUTE OF MANAGEMENT

BODH GAYA

Business to Business Marketing

Case Study Analysis

Submitted to

Prof. Swapnarag Swain

By Group 6

Name Reg No
Abhishek Pandey MBA/1102/07
Arindam Bera MBA/1114/07
Bhushan Supare MBA/1117/07
Dhritiraj Misra MBA/1119/07
Gautam Aditya Deb MBA/1123/07
Harshit Sanghi MBA/1127/07
Prajwal Katakdhond MBA/1139/07
Sumanth V Revankar MBA/1162/07
Lok Kumar Verma MBA/1228/07

On
26/09/2022
 Doosan Infracore International: Portable Power Brand
Transformation (A)
Background of the Case: -
Doosan Group is one of South Korea’s oldest conglomerates. It began in the 19th Century with a retail
store, then expanded into manufacturing consumer goods and also into sectors like car dealerships,
restaurant franchises among others. Doosan Infracore, established in 1937, and attained its current form in
2005, is Doosan’s one of the many ventures in the B2B Sector. Its objective is to become one of the top
five players in the Infrastructure Support Business.
The case mainly deals with Doosan Infracore International (DII), the compact equipment division of
Doosan Infracore. DII has been responsible for building and expanding the compact equipment sector in
markets like Europe, North America and China.
DI, in June 2007, acquired from Ingersoll Rand, three compact equipment business units: Bobcat Compact
Equipment Vehicles, Ingersoll Rand attachments for Bobcat Vehicles under various brands and Ingersoll
Rand Utility Equipment (Portable Power). This was the biggest foreign acquisition by the firm. Bobcat will
enable DI to become a global full-liner like Caterpillar and Komatsu, with its extensive penetration in
Western market, as well as its broad product line being comparable to the market leaders. The various
attachments will add further functionality for Bobcat equipment.
Yet, the acquisition still has its caveats. DII did not acquire IR’s factories, or the intellectual property- the
airend component. Also, the IR brand has been licensed for only five years to DII. Hence, DII is in a rush
to rebrand its Portable Power division.
The compact equipment product consists of a two-stage deployment process. Manufacturers usually sold
products to dealers, while dealers sold or rented equipment to end-users. In some cases, customers dealing
in higher volume tend to be served directly by the manufacturers. End-users usually buy from a preferred
distributor or else, seek out a particular brand within their proximity.

What are the driving forces behind Doosan’s acquisition of the three compact equipment
business from Ingersoll Rand?
Ans- The driving force behind Doosan’s acquisition as follows:-
1. In terms of competitive positioning, DI viewed the acquisition as a means to becoming a global
full-line company.
2. Three business units gave DII an immediate and strong presence in compact equipment worldwide.
3. The acquisition instantly put Doosan on the compact equipment map, and significantly moved the needle
toward becoming a top five global ISB player.
4. By integrating the Bobcat and other DI lines, along with future additions, DI could begin to move
into the global full-liner competitive space.

Q2:- Why does Doosan typically re-brand acquisitions to the Doosan brand name?
Ans:- Firstly we would like to give a few examples of the possible re branding of the acquisitions done by
Doosan and its impact on the organization
Case 1 : Doosan experienced sustained growth as it entered the twenty-first century thanks to technological
advances, inventions, and acquisitions. 2007 saw the purchase of Ingersoll Rand. At the time of acquisition,
portable power (utility equipment) was a highly profitable market within the construction industry, while not
always a Doosan was working to finish its portfolio of compact equipment. The acquisition immediately
established Doosan as a leader in tiny equipment, and made substantial progress toward ranking among the top
five global ISBs player.
Case 2 : The business relaunched as Doosan Infracore in 2005 and revealed a new corporate vision: To rank
among the top five players worldwide in the infrastructure as a business enabler. Daewoo supplied huge
hydraulic excavators that were still orange in hue when dual branding was implemented, with both the Daewoo
and Doosan brands on the merchandise, leading ultimately to Doosan-exclusive branding. The company's brand
was so well-known that many veteran contractors and end users even dubbed it "Ingersol" compressors. This
was a case of rebranding done by Doosan
The possible reasons of the re brand acquisitions done by Doosan are:
● Strong entry hurdles caused by high production costs and a lot of brands that Doosan had to compete
against made its task difficult.
● Distributors typically stocked just one brand of compact equipment per category, assuming the
manufacturer had a complete line; otherwise, several distributors would fill in the gaps.
● Successful push marketing through catalogs, ads, trade shows, direct selling, and attendance for
distribution coverage to be obtained, placement in trade journals was essential. Support from the
manufacturer's service department was also crucial for keeping dealer accounts.
● Doosan had no interest in supporting other companies' brands but in fact wanted the acquired company
to integrate the philosophy of Doosan and shift to its philosophy so that the acquired companies can live
up to the business, ethics and competitiveness of Doosan.

Q3: - What are the pros and cons of the four brand transformation scenarios? Which of the four scenarios
would you recommend and why?
Ans: - The four brand transformation scenarios are as follows: -
1. Keep the IR brand by renegotiating the agreement
2. Begin co-branding strategy over 12-24 months, then transition to Doosan
3. Retain the brand for the full five-years, then transition to Doosan
4. Immediate transition to Doosan
Scenario 1: - Keep the IR brand by renegotiating the agreement
Pros
1. IR Brand holds a significant chunk of the
air compressor and work tools sector with
a premium reputation
2. Keeping the brand name for an indefinite
period by renegotiating the contract, DI
will be able to leverage IR’s extensive
dealer network.
3. Renegotiating will also open the possibility
of keeping the plants as they are, with DI
retaining ownership, without any
relocation.
Scenario 2: - Begin co-branding strategy over 12-24 months, then transition to Doosan
Pros
1. Co-branding will help leverage IR’s
extensive dealer network as well as 100+
year long brand equity.
2. Increased brand visibility and brand
awareness will improve for Doosan,
leveraging on IR’s established dealer
network as well as brand equity.
3. DI will be able to establish a customer base
for itself among the niche sector of basic
utilities equipment.
4. Doosan will be able to build brand
relationships with customers, and
eventually brand loyalty.
5. Doosan will be able to push marketing
strategies employed by IR to promote their
own brand equity.
6. Doosan has implemented a similar strategy
with Daewoo, for large hydraulic
excavators in China, and still retained
market leadership of Daewoo’s.
Cons
1. Retaining the IR Brand for an indefinite
period will mean acquiring the whole
company, and that would mean excessive
resource drain as a part of the contract.
2. Renegotiating a contract for retaining IR’s
brand equity, will mean keeping IR brand
on their compact equipment product will
mean strengthening IR brand, and instead
of DI’s.
3. Portable Products tend to sell at 5-10%
premium, while Doosan’s products are
sold at 10-20% price discount. Keeping the
status quo will mean different positioning
strategies. Hence, this will mean drain on
resources, as the advertising campaign will
be a drain on Doosan’s resources.
Cons
1. Co-branding will lead to brand dilution for
the Portable Power division.
2. Co-branding will not make a coherent
branding strategy.
3. Co-branding won’t communicate
important points of differentiation to
targeted customer segments.
4. Co-branding will create problems as
Portable Power’s current dealer network
would shortly undergo serious changes for
DII to establish itself in the EMEA and
North American Market.
Scenario 3: - Retain the brand for a full five years, then transition to Doosan.
Pros
1. Helps in smoother transitioning, with
respect to distributors. Management will be
able to retain the same customer base while
subtly transitioning to their desired
distribution network.
2. DII will be able to leverage their own
extensive distribution network, present in
western markets.
3. No change in branding required in real-
time.
4. Doosan can aim for price skimming with
Portable Power.
Cons
1. After 5 years, Doosan won’t be able to
make an abrupt shift from IR to DII. The
change will end up losing customers for the
company.
2. Customers tend to be price sensitive.
3. DII has 12 months to exit all of IR’s global
factories in Mocksville, Shanghai and
Unicov. Maintaining premium product
quality of IR, while still maintaining
operational efficiency won’t be easy
enough for DII.
4. Most manufacturers are unable to
influence the decision making process of
the customer, especially if they source
compact equipment from multiple dealers
in different locations.
5. To establish a distribution network in
North America, they would need word-of-
mouth referrals and point-of-sale dealer
marketing.
Scenario 4: - Immediate transition to Doosan
Pros Cons

1. Opportunity to reposition the brand.
2. Expansion of Doosan’s brand.
3. Corporate’s objective of enhancing
product portfolio would be quickly
achieved. This would expand and
strengthen DI’s global manufacturing and
sales network.
4. In 2007, Doosan made headlines with 14 of
their products in Korea’s Top Export
Products by the Ministry of Knowledge
Economy. Entering a new market would
mean opportunity to leverage on the
current upturn.
1. Doosan would not leverage brand equity of
IR.
2. DI would not be able to charge premium
price on IR products.
3. DI would incur extensive costs as the
sector itself is capital intensive and demand
tends to be cyclical.
4. Without the existing distributor networks
as well as the lack of established large
customer base, it would be difficult to
maintain operational efficiency.
5. Customers are price sensitive, and their
loyalty depends on use and reuse of the
product. Establishing in the market would
require time.
6. Customers would have different
preferences. DI is a East-Asian brand with
different B2B Customer requirements.
7. Incoming recession would be a major blow
to instant repositioning strategies.

Recommendation: -
By analyzing the pros and cons of the various scenarios, we have come to the conclusion that Doosan should
go for- co-branding strategy over 12-24 months and then transition to Doosan. Here are the reasons for
that-
● Doosan has experience implementing such a strategy before, where in China, Doosan acquired
Daewoo’s large hydraulic excavators, with both Doosan and Daewoo names on the product- and
ultimately to Doosan-only branding.
● Doosan has more freedom to implement Doosan Visual System for rebranding purposes in the Co-
branding option, than in the other relatively profitable option.
● Doosan would be able to inculcate the Doosan way with its new sectors.
● The incoming recession would require holding onto customer loyalty, with products that are high
in symbolic and functional value. To establish a foothold in the Western market, Doosan would
require leveraging on IR’s extensive dealer network.
● Building a new network won’t be easy enough as the construction industry would be undergoing a
recession.
● Within the current contract clauses, it would be the best of the option.
● Doosan acquired the people from Portable Power, hence they retained IR employee’s expertise and
experience.
● By 2008, co-branding would be the right way to choose without prolonging the inevitable while
still retain some possibilities of profitability.