CATERPILLAR INTRODUCES NEW PRODUCT SUPPORT STRATEGY FOR MINI HYDRAULIC EXCAVATOR RUBBER BELTS

This IRM announces the pricing alignment, advertising campaign, and improved availability of Caterpillar? Mini Hydraulic Excavator (Mini Hex) Rubber Belts for the 301.5 through the 305CR models.  Current support of this product has over 700 belts in Cat parts distribution facilities worldwide.  This inventory will continue to be maintained and adjusted as worldwide demand dictates.

Pricing Alignment

 A pricing review was completed as part of a team focused on sales growth.  The pricing review incorporated belt features, third party accelerated wear testing, competitive pricing surveys, and customer satisfaction surveys.  On April 5, 2004 the results of the review were implemented to improve the price/value relationship.

Advertising Campaign

 Caterpillar has developed an ad campaign to grow the sales of Mini Hex belts.  The campaign, which will begin Summer 2004 in multiple national publications (Ad pictured on page 1) focuses on critical customer requirements derived from customer satisfaction surveys.  The advertisement, along with the pricing alignment, is focused on bringing the Mini Hex customer back to their local Cat dealer for replacement belts.

Inventory Adjustment

 In support of both the ad campaign and the new pricing strategy, we have implemented a 15% increase in belt inventory to support the anticipated growth in demand.

Mini Hex Belt Part Number to Machine Coverage

Independent Belt Testing Results

 Testing conducted by an independent third party lab included Caterpillar belts for a 301.5 Mini Hydraulic Excavator and the same size belt from a leading aftermarket belt supplier.  The testing focused on measuring tread wear under controlled conditions.  The independent lab ran tread cap abrasion resistance testing using DIN procedures 53516.  This testing removes rubber plugs from the belts at approximately 90-degree locations for a total of 12 plugs per belt sample.  The sample volumes are accurately measured before and after the samples are run on a Zwick Abrasion tester.  Samples with less volume reduction indicate less wear.  The results were:

 In this controlled scientific wear test with 12 samples from each belt the Caterpillar Mini Hydraulic Excavator Belt wore 13% less (21.7 cu. mm) than did the leading aftermarket supplier?s samples. (It should be noted with any kind of scientific testing with small sample sizes there can be statistical errors that exist.  Further testing would be required to statistically show with a high degree of confidence that the results discussed here could be applied to every Caterpillar Mini Hex Belt and every belt from the leading aftermarket supplier)

Warranty

Please refer to the Caterpillar Warranty Statement for: Compact Wheel Loaders, Mini Hydraulic Excavators, Skid Steer Loaders and Multi Terrain Loaders New Replacement Engines And Associated Work Tools (SELF5324-01)