To casual observers, the hundreds of mergers affecting national companies during the past decade seem to mesh together as smoothly as shifting into high gear while driving a well synchronized sports car. The fact that this is just the impression that consolidating companies what to convey is often the result of months of pre-planning strategies that coordinate operations, personnel and marketing functions.
But how can a new public image be acquired? How can present customer loyalty be maintained and future customers wooed so that the increased capabilities of this consolidated company can be realized to its fullest potential? These problems faced two well known leasing companies in the fall of 1970 when Commercial Credit Company decided to merge its Commercial Credit industrial Corporation subsidiary with McCullagh Leasing, Inc. To find the answers, managements of both companies pooled their thinking in order to develop an effective, combined marketing strategy. Here are some highlights of that plan.
Both firms were well established subsidiaries of Commercial Credit Company with significant histories of success in leasing and allied fields. Commercial Credit industrial Corp. was formed in 1964, seven years after its parent organization entered the field. Since this time it has concentrated on national accounts whose fleets of vehicles numbered of least 25 units. It also leases or finances computers, capital equipment and machinery to manufacturers, wholesalers, retailers and other commercial firms throughout the United States.
McCullagh's history goes back to 1949 when Don McCullagh decided that there was a profitable market in the Detroit area for leasing individual cars to executives. He had developed this service over a period of several years as owner of a large Chevrolet franchise. After establishing McCullagh Leasing program on a national scale and subsequently added fleet leasing for commercial and industrial organizations. In 1966, he merged his company into the Commercial Credit organization. It was apparent that the two subsidiaries shared common services, yet each one had particular strengths that the other lacked. Furthermore their degrees of market penetration in geographical areas and for product lines tended to supplement rather than duplicate one another.
Don McCullah, former President of McCullagh leasing, Inc. heads the consolidated firm as Chairman and, serving as President, is CCIC President John A. Blessing. Top officials from the original McCullagh organization include T. Jack McCullagh, Executive Vice President- Marketing; Thomas W. Roberts, Vice President-Financial Management; William W. Wise, Vice President-Individual and Small Fleet Sales; and Roger V. Mulier, Vice President-Personal and Administration. Former CCIC officers filling top posts are Tucker Grinnan, Vice President-Operations; William P. Keenan, Vice President-National Account Sales; and John J. Stewart, Vice President-Credit and Collection.
Marketing Strategy and Goals
The consolidated company began business with 25 field offices; its total number of vehicles under lease made it the country's third largest firm handling this type of business. To solidify this position in the vehicle leasing field, it was decided to concentrate all vehicle leasing plans-both fleet and individual-under McCullagh's existing programs. This strategy capitalizes on McCullagh's fleet leasing successes in Detroit and other territories by programming concerted sales efforts in 20 metropolitan areas within the next five years.
The sales campaign promises significant results. As lessor, McCullagh can exercise complete control over the important function of prepping new cars prior to delivery. Complete control means customer satisfaction, and McCullagh will utilize its recently completed garage prepping facility at its administrative headquarters in suburban Detroit for this purpose (see Sept. '70 A.F.). The garage has 15 boys, seven with hoists, so that even fairly large fleets of automobiles can be processed effectively within a short period of time. In addition, supplemental prepping centers are being established in eight zone locations throughout the country.
Shortly after the two companies merged, the new organization's national sales and service forces were primed to present details of individual and fleet leasing programs to clients and prospects. As in the past, these programs can be custom-tailored to particular can be custom tailored to particular needs the company is equipped administratively and operationally to supporting its policy of adjusting leasing plans to fit individual requirements.
McCullagh's core of 25 field offices will serve as a nucleus for strengthening its sales and service. Of these, eight are or have been expanded as complete zone locations which are staffed with a manger, credit manger, national sales manager, sales representative for both individual and fleet sales, and a prepping center. The remaining seventeen offices will serve as sales and service centers.
The company's short range plan is, of course, to become firmly established in major marketing areas within the United States. In addition, it has already begun work on longer range plans which call for expansion to overseas operations.
For several years, McCullagh Leasing has had representatives servicing clients' needs in 15 foreign countries. Market analysis shows that leasing services are badly needed there, that leasing programs can be operated effectively and profitably in foreign countries and it realizes that additional profits can be realized by building its overseas operations into full scale, full service facilities.
What goes into a business merger? A lot of long hours, sweat and frustration during the planning stage. But if these plans represent the collective thinking of the best minds of both companies, it will mean smooth following a merger during the long range program. But the key to all of this work is market planning. It's a mandatory methodology for any mighty merger.