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Case #3
“Dominion Motors & Controls, Limited 1980″
Harvard Business School Case: #580-149 (Rev. September 23, 1992)
Academic instructors who are registered with the publisher’s
website (http://www.hbsp.harvard.edu) may download the Teaching
Note #5-589-119 (rev. December 12, 1989) for this case free of
charge.
ABSTRACT
Dominion Motors and Controls makes, among others, oil well
pumping motors. The company has the reputation of offering
TEACHING OBJECTIVES
The objective of this case is to expose students to the
complex issues related to marketing industrial products. These
SUGGESTED QUESTIONS FOR CLASSROOM DISCUSSION
1. What is the basic marketing strategy employed by Dominion
Motors for its industrial products?
ANALYSIS
1. What is the basic marketing strategy employed by Dominion
Motors for its industrial products?
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A. Product – Dominion markets their oil well pumping motors of
varying horsepower and with a starting torque lower than the
B. Price – The company’s products are priced competitively,
including discounts to large buyers.
C. Promotion – To promote and sell products, Dominion uses
D. Distribution – The company sells to customers both directly
(80 percent) and through distributors (20 percent).
2. How do you characterize the markets which are being served by
Dominion Motors?
Dominion Motors has 25 large customers, each with over 50
wells plus a number of small customers. The market research
3. What are the developments in the marketplace which caused
Dominion management to be concerned?
Hamilton Oil is a large customer of Dominion Motors. It
conducted tests which ranked Dominion’s motor products behind its
TABLE C3-1. ESTIMATED COSTS RELATED TO MOTOR POWER
HP Monthly Charge Annual Cost
5 $15.00 $900
Dominion management had not received any complaints from its
4. What are the options available to Dominion management? Review
the advantages and disadvantages of each.
There are several options open to Dominion management. These
include (1) reducing the price of 10 HP motors to that of the 7.5
A. Reduce Price of 10 HP Motor to that of the 7.5 HP Motor.
This option has the advantages of being immediately
implementable; it avoids challenging or upsetting Hamilton, meets
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B. Re-Engineer the 7.5 HP Motor to Match Starting Torque.
The reengineering option focuses on creating one of the
following two new motors: (a) a “Hot” motor – upgrade the
C. Initiate an R&D Program to Build a Special Purpose Motor (5
HP Motor with Starting Torque of 10 HP Motor).
The option of developing a special purpose motor, which is
rated at 5 hp but with a starting torque of 10 hp motor, is
technically doable. Such a motor would meet customer’s needs more
D. Persuade Hamilton to Change their Conclusions.
To implement this option, Dominion may contact the VP
Purchasing at Hamilton to talk them out of publishing the test
E. Wait-and-See (Do Nothing).
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This “do nothing” option should also be considered. The time
gained can be used to get more information, gauge users’
reactions and closely monitor the situation. Taking a wait-and-
F. Promotional Campaign.
One more option Dominion may pursue is to wage a promotional
campaign to directly respond to the Hamilton test and its
conclusions.
Dominion may collect statistics of starting failure cases in
the past to demonstrate that the adequacy of the present starting
The advantages of this option are that it is a low cost
initiative, that Dominion may beneficially use its own best sales
person who has an excellent rapport with oil field customers, and
that Dominion cares about users’ needs.
5. What should the Company do in the Short- and Long-term?
Having laid out all the options specified above, it is now
time to decide on the right course of action for Dominion Motors.
A formal and rational way of making decision is of course to
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