Snap-on Tools began its business in Milwaukee, Wisconsin, in1918. The original business sold an interchangeable socket wrenchset directly to auto mechanics. Snap-on Wrench was incorporated in1920. They intended to grow the business in a typical fashion byoffering its wrenches in an indirect marketing channel throughdistributors. The distributors, at that time, were less thanimpressed with the product and Snap-on had difficulty getting itsproduct into the hands of end-users. The founders developed aselling strategy that presented the tools directly to the mechanicswith a demonstration and opportunity for the mechanics to try outthe product. By 1927 the transition to direct selling-- “fromfactory-to-warehouse-to-you”—was completed. Although in the past 80years the sales force dynamics have changed, the basic commitmentto direct selling has remained the cornerstone of the Snap-onmarketing strategy. In 1939, the Teamsters Union attempted toorganize the branch sales force. In direct response, Snap-onintroduced a new distribution method by selling territories toindividual sales representatives (dealers) and having them carryproduct inventory in their vehicles for immediate delivery to thecustomer. The final step in the marketing evolution wasestablishing each independent dealer as a franchised owner carryinga rolling stock of Snap-on small hand tools. In an effort toincrease volume, Snap-on started a program (that still existstoday) of selling to mechanics on credit with weekly time payments.The company backs this credit program as it proved to increasesales and generated customer loyalty. Snap-on’s growth since 1960has been impressive. Despite rapid growth Snap-on has not waveredfrom its core marketing strategy. The company’s basic purpose hasremained unchanged – “the production and sale of quality hand toolsand related items to professional mechanics and industrial users.”Today Snap-On is a $3.1 billion company and is publically-traded onNASDAQ as SNA. Snap-on concentrates on selling direct to end-usersthrough a system of salesperson-franchisees and distributors.Today, there are 4,800 franchise dealers driving theirindependently-owned white cargo vans loaded with more than $100,000worth of inventory to over 300,000 car dealerships, servicestations, and independent repair shops around the U.S. and abroad.Snap-on is committed to quality. To tool-lovers, Snap-on is the“gold standard” similar to Rolex, Rolls-Royce, and Chivas Regal intheir own markets. Snap-on’s target market is distinctivelyblue-collar, lower-to-middle income level with a limited access tocredit. The market consists of 1.25 million automobile, truck, andairplane mechanics. However, Snap-on sees itself as an upscaleretail operation disguised as a manufacturer of tools. For thosewho fix cars for a living, tools are like toys and entering theSnap-on van is like entering a toy-lover’s fantasyland. However,Snap-on utilizes a pull strategy with the end-users built on trustrather than emotion. Snap-on has stayed focused on its corecustomer avoiding expansion into other related areas likeconstruction and home improvement. Snap-on charges premium prices –about 10% more than its direct competitors. To respond to newcomputerized components on vehicles, Snap-on has added diagnosticequipment under the name Snap-on Diagnostics and another van makesthe circuit with a technical representative who backs up thedealers and their increasingly-complex product line with trainingand technical advice. Snap-on utilizes four channels: mobile vanfranchises, company-direct, distributor and the Internet. Thecompany-owner vans only comprise 3% of total business and are usedto open new markets. A select number of distributors purchaseproducts directly from Snap-on and then resell them to end-users.Snap-on markets its products and brands through multipledistribution channels in approximately 130 countries. It hasreplicated the franchised mobile van in several countries. Snap-onhas always avoided huge advertising and promotional expenditures,relying instead on direct-selling and a product catalog (print andonline) offering over 14,000 products. Snap-on maintains a 60%share of the mobile-van tool business with their closestcompetitor, Mac Tools, holding just 13%. A single Snap-on van withapproximately 160 square feet of cargo space typically producesmore than $400,000 per year in revenues. Snap-on’s net sales in2013 were $3.1 billion--an increase of about 4% over 2012.Questions: 1. What are the four key components of the Snap-onmarketing strategy? 2. What one element of Snap-on’s marketing mixdo you think separates it from its competition? 3. How would youdescribe Snap-on’s marketing channels (distribution)? 4. Assumethat average annual per-square-foot sales for specialty retail areapproximately $400 per square foot. How does this compare toSnap-on’s revenue generation per square foot? Why do you thinkthere is such a difference?