Chainsaw Industry in 1974

Chain Saw Industry in 1974

There were only two options to succeed in the chainsaw industry in 1974. One was to differentiate the product and sell to a specific niche market. The second option was to keep the price on the product low and sell to a wider market. Firms that did well using option one include Stihl, Skil, and Husaquarna. Firms that did well using option two include Homelite, McColloch, Beaird-Poulan, and Remington. Companies that did not hold large market share or have high profits in the Chain Saw industry were firms such as Roper, Pioneer, and echo who specialized in other products. Selling through the right retail channels was also a key factor. There were mainly three markets segments for the chain saw industry: professionals, farmers, and occasional or “casual” buyers.

Each market segment was separated by what the chain saws were being used for and how often. This in turn usually specified what size or cubic inch displacement they were most likely to use. Professionals used theirs for everyday use as the principal tools of the business. These pros used larger displacements of 4.5 or greater. Farmers however, used displacements between 2.7 and lower and tended to use theirs heavily. Then for the casual users a displacement of 2.7 or lower was purchased. Price also segmented the markets, with casual users mostly purchasing chain saws at 200 dollars or lower while pros and farmers purchased ones at 200 or higher. The casual market started to grow rapidly at the beginning of 1974, almost doubling in units sold with 430 thousand in 1972 to 803 thousand in 1973. Companies that differentiated with higher quality built their Chain saws mainly for pros and farmers while the companies that sold at low cost and had large market share built a wide variety to sell to all three segments. The companies holding the larger market share also sold through many retail channels.

The larger market share companies sold to retail channels including wholesale...