Coupling and uncoupling rail cars. As a third-generation railroad man, 27-year-old Jeremy Givens knew the job’s dangers. Growing up, he’d heard the stories of lost limbs and lost lives from his father and grandfather. So as he was switching out a 5,000-ton cut of freight cars in a Cheyenne, Wyoming rail yard last fall, Givens was trying hard to do it right, to do it safely.
The accident happened anyway.
The flat car Givens was working on shuddered unexpectedly, knocking him off balance and down toward its now moving wheels. As he scrambled to break his fall, Givens jammed his right boot behind a coupler. It was, he knew immediately, “the wrong spot.” But before he could do anything about it, the car he was barely clinging to rolled into another.
The coupler shunted back violently, instantly snapping off two of the five metatarsal bones in the trapped foot. Damage to neighboring tissues, nerves and blood vessels would later force surgeons to amputate two toes and require Givens to undergo painful skin grafts; months of daily oxygen treatments in a hyperbaric chamber would follow.
But his medical team is confident Givens will walk and work again – and they say he can thank his Cat brand steel-toe boots for that. Absent the protection they provided, paramedics and doctors say it’s likely Givens would have lost his foot completely. “They all tell me it could have been worse,” he says. “Much worse.”
Caterpillar makes hundreds of great products. Footwear isn’t one of them. It doesn’t make apparel either or any of the other 25,000 individual consumer products – from phones and watches to eyeglasses and die-cast toys – that are emblazoned with its name and sold in stores and on websites like shopcaterpillar.com, catlifestyle.com and catfootwear.com.
Those products are made by third-party companies that have been granted a license to use the Cat and Caterpillar brands under strict controls. On the day of his mishap, Givens was wearing a boot manufactured by Wolverine Worldwide, a Rockford, Michigan-based company that has produced Cat brand footwear since 1994.
But the quality of Givens’ work boot, its performance when it really mattered, was no accident. Caterpillar didn’t build the boot. But the company’s trademark merchandise licensing team collaborated closely with Wolverine to ensure Caterpillar’s commitment to durability, reliability and customer safety was incorporated into the boot before the Cat brand went on it.
“We work together as a team,” says Onder Ors, president of the 200-employee division inside Wolverine dedicated to handling the Cat brand footwear line around the world.
“Everything we do we do with the people in Peoria.”
Kenny Beaupre, licensing manager for Caterpillar, agrees. “It’s a true partnership. Wolverine and our other licensees help protect and extend the value of our brand through their strong product expertise and collaboration. They are part of the Caterpillar family.”
Lesley Godby says it was the best job ever.
In 2002, after several years with Caterpillar’s engine division, Godby joined the merchandise licensing team as a product analyst. Her big responsibility? Reviewing Cat brand products that licensees submitted for final pre-sale inspection.
“I love to shop,” Godby says, “and to me it was like I was shopping all day long. I thought to myself: ‘They’re going to have to kick me out of here. I’ve found my calling.’”
Today, Godby is one of six program managers on the licensing team, helping to screen the dozens of companies that approach Caterpillar each year eager to put the Cat name or logo on their products. In a typical year, very few of the hopefuls will get a deal.
When proposals come in, Godby and her colleagues ask themselves a series of questions. Is the proposed item consistent with the Cat brand promise? Is it durable and safe? Will it be a source of enduring satisfaction and delight for the customers who buy it? Does the proposing company have a history of brand-building accomplishment? Is it a recognized leader in the category of merchandise it’s proposing?
Even if it passes those initial screens, a pitch can fail if it just doesn’t make sense to link the proposed product with Caterpillar’s name and reputation or if it exposes the company to unnecessary risk. That explains, for instance, why there is no Cat cologne – though the idea was floated by a would-be licensee. Ditto for Cat brand foods. For humans or pets?
References and backgrounds are checked. Godby and her fellow program managers Jie Liang, Phil Raso, Angela Bernard, Sara Hays and Adrienne Davis examine the financial strength and stability of would-be licensees as well as their distributors and partners.
And they ask tough questions: Do they have a reputation for square dealing? Do they have the capital and the banking relationships to fund the successful rollout of the proposed product? Do they strive to be best in class with availability and delivery of product?
The screening doesn’t stop there. Once the licensing agreement – a 30-page contract that may include many more pages of exhibits – is signed, nothing can go to market until the trademark licensing team has inspected a physical sample and signed off on the item.
“We have a pretty intense approval process and some deals don’t happen because of it,” says Hays, who joined the team after doing similar work at The Walt Disney Company.
Every day, 60 to 70 packages arrive on the sixth floor of Caterpillar’s Peoria headquarters.
The packages contain samples that licensees and their suppliers are contractually required to submit to the company for a final check before the items can be sold.
The job of opening the boxes and reviewing their contents falls to the team’s latest cohort of product analysts: Bryan Collier, Leslie Jones and Cara Risius. Jones jokes that “every day is little bit like Christmas” because the analysts are never quite certain what’s inside any given box – though the size of the package and the return address provide clues.
After looking over the enclosed paperwork, the first thing an analyst checks is the product’s Cat logo, making sure the appropriate trademarks are being used and displayed properly. The color, the font, even the size of the logo is scrutinized to make sure it complies with the standard. When in doubt, the analyst will whip out a transparent exemplar containing all the permitted permutations of the logo and trademark and place it over the sample, alert for any deviations.
Then things get physical with the analyst tugging on seams and tags, fastening and unfastening zippers and snaps, and spinning the wheels on toys to check their durability and quality. Consumer product safety testing is reviewed and documented.
Items with any issues are sent back for more work. Items that pass inspection are approved. Either way, the licensee will get the team’s decision within 48 hours of the sample’s arrival.
Sample items that pass inspection are then sent to a satellite warehouse in Peoria, where they are stored for up to seven years if they are safety related or have any tort potential. Think work boots, children’s toys, infant clothing and knives.
Program managers like Godby and product analysts like Collier do different things. But they share a basic goal: To ensure that licensees and the products they sell enhance Caterpillar’s reputation.
“That’s a top priority with our group,” says Collier, who came to Caterpillar after working for a Cat licensee for nearly a dozen years, where he experienced the rigorous inspection and approval process from the other side.
“We make sure our licensees are very conscious of the fact that they are an extension of our brand. So those core values of the Cat brand – reliability, durability, safety – they all need to be incorporated into the merchandise. There has to be that connection.”
Done right, brand licensing is a win-win. Licensees benefit from the reputation that Caterpillar has successfully built up around its brand during its long history. Caterpillar gets to leverage its good name, and extend the brand outside the capital goods space, without investing a lot of money or being distracted from its core businesses.
“Our licensees spend a lot of money on advertising their products,” says Raso. “So we get the carryover from that.”
And licensed products create fans in unexpected places. Like Jeremy Givens and his wife Ashlea, who have become evangelists for the Cat brand in the aftermath of his accident. Or like Omar Dakhane, a luxury fashion executive in Dubai and accomplished amateur photographer whose hobby takes him into remote, rugged and often hostile environments.
Dakhane, who has tens of thousands of followers on Facebook, recently posted this message on the social media website:
“I never believed in ‘brands’ when it came to clothing. But now I do believe in one brand when it comes to heavy duty clothing. Cat Products. I've been wearing their shoes and jackets for the last year and I've never seen something more durable. Last experience was during my winter trip to Algeria where I walked in water with the whole shoe underwater. The water never got through and the shoe became completely dry seconds after it came out ...I highly recommend this brand if you're into extreme hobbies. I'm planning to head to Siberia by the end of this year and I know where I will be getting all my clothes for that trip.”
Testimonials like that warm the hearts of the marketing team and help extend the brand’s reach. But like any business, trademark licensing has its sources of heartburn, too.
Caterpillar established its trademark merchandise licensing team, and began licensing in earnest, in the mid-1980s. Brand equity mania was sweeping U.S. boardrooms at the time. Philip Morris had just purchased Kraft for six times what the food company was worth on paper and the cigarette maker justified the eye-popping premium by citing the value of the "Kraft" brand name. Suddenly, tapping into the equity locked up in brand names -- and growing it through licensing deals -- became a priority at a lot of U.S. companies, including Caterpillar.
But the inclination to put the company’s name on items unrelated to its core business was, in a sense, older than Caterpillar itself. Lee Fosburgh, supervisor of the company’s corporate archives, says that C. L. Best Tractor Co. and the Holt Manufacturing Company – the two companies whose 1925 merger created Caterpillar – both distributed watch fobs, cigar cutters, screw drivers and other promotional items in the early 1920s.
Last year, consumers worldwide purchased about 50 million pieces of officially licensed Cat merchandise. Appreciation for Cat products goes far beyond the people who work with the machines and engines daily, and licensed merchandise provides the opportunity to reach people who otherwise may never have had an experience with the brand.
But brand licensing needs to be done very carefully. During the brand equity mania of the 1980s and early 1990s, some major companies delved into brand extensions that didn’t make sense. Some of the items they allowed licensees to bring to market alienated core customers until they were discontinued. But even today, they remain case studies in the marketing world for bad brand extensions.
And licensees need to be monitored closely because sometimes – rarely but spectacularly – they go rogue. Caterpillar’s two-decade-old relationship with Wolverine, the company that manufactured the boot that saved Givens foot, began in 1994 after an earlier footwear licensing agreement went sour.
The partnership with Wolverine, now in its third decade, has coincided with the rapid economic development of economies like China, Brazil, India, Latin America and Indonesia.
Ors, the head of Wolverine’s Cat unit, says the important role Cat machines and engines played in the rise of those emerging countries has made them especially good markets for merchandise. “In the developing world, where Caterpillar literally helped build economies or helped improve them, it’s seen as a positive, engaged brand,” Ors says.
Today, Wolverine sells Cat footwear in 150 countries and debuts about 800 new Cat-brand SKUs a year. As a result, the company is not only one of Caterpillar’s oldest licensees, it is its biggest.
Work boots remain a key product line – especially in North America. But globally, they account for somewhere between 25 and 30 percent of all unit sales. Ors says outside North America, Cat has become a lifestyle brand, like Carhartt or Levi’s or Harley-Davidson -- another U.S. manufacturer whose footwear Wolverine makes.
But Cat’s brand allure is unique, Ors says. “It’s seen as authentic, tough, dedicated, dynamic and bold.”
And, of course, safe. All the Cat brand work boots that Wolverine makes are built to meet ASTM (formerly known as the American Society for Testing and Materials) lab standards for foot protection.
And those certifications matter in the marketplace and the workplace.
Jeremy Givens purchased his Cat brand boots because they were officially recommended by his employer based on their ASTM safety rating.
They were the first pair of Cat boots he has owned. Based on their performance last fall when it mattered most, they won’t be his last, his wife Ashlea says.
“We will purchase more Cat wear in the future just because of this,” she says.