Brand Essence

Understanding the Brand essence

• Husqvarna reflects a high degree of quality and

craftsmanship.

• The price point of the product reflects the value we wish to

pass on to our customers.

• Customers satisfaction and LAUGHLIN & DE GANNES ability to

support has proven a successful factor.

The Trinidad Market

STIHL

• A brand perceived as of high quality as the Husqvarna

product, with an excellent track record established over fifteen

years on the island.

The Trinidad Market

Shindaiwa

ECHO

Red Max

• Other brands contend for market share based on a high level

of visibility.

The Trinidad Market

Tanaka

Ryobi

Craftsman

Maruyama

• Additional products which are price pointed as even lower

alternative offering to the customer.

History

• Laughlin & De Gannes embarked on offering the Husqvarna Lawn and Garden as part of its product range.

• Based on the model seeking to establish a network of dealers.

• Our network started with two dealers and expanded to twelve locations island wide.

• The product was also traded through the Laughlin & De Gannes retail outlets – TOOL STORE.

The dealers concept

• The majority of these dealers already carried product lines of

all of the competing brands mentioned.

• Our Husqvarna product entered priced in order to penetrate

the market.

• The brand was new to the consumers and made a

challenging proposition for the dealers as well.

Retail Trade

• While the dealers were struggling to establish the products

even with our full support.

• Our own Retail experience was quite the reverse as the TOOL

STORE sales were in most instances constantly surpassing

the dealers.

Price structure

• The pricing strategy of the dealership network was set to

allow the dealer to assume the benefit of moving the product

at the retail price tag lower than the market leaders.

• Offering the dealer a strong incentive to move the product.

• This structure while envisioned to move the product bore low

margins for us.

LAUGHLIN & DE GANNES

Dealers

Profit structure

10% 25%

Pricing structure

• Dealership: (Laughlin & De Gannes to Dealers = 10%

margin, Dealers through sales to their customers= 25%

margin).

• Retail: (Laughlin & De Gannes to TOOL STORE Customers

35% margin).

• Even with the strategy seeking to grow the business through dealerships; the sales out of the TOOL STORE were exceeding

the sales of the dealers.

Trinidad & Tobago’s Market conditions

• Data from our Central Statistical Office regarding Trimmers

and Chainsaws importation into Trinidad & Tobago spanning

2007-2009 also indicates a decline of the product line across

the board.

• 2007-2208 the importation decreased by -2%.

• During 2008-2009 there was a further decrease in importation

of these products by -22%.

0

5,000

10,000

15,000

20,000

25,000

30,000

2007 2008 2009

CSO Out Garden Products imports 2008-2009

Trinidad & Tobago’s Market conditions

Trinidad & Tobago’s Market conditions

• This Central Statistical Office data regarding Trimmers and

Chainsaws importation spanning 2007-2009 indicates the

following countries of origin as the source of products entering

the market here in Trinidad & Tobago.

• While this indicates the potential for the Husqvarna brand,

other conditions impact on the growth.

Trinidad & Tobago’s Market demographics

11%

27%

8% 13%

2%

39%

CSO Trimmers & Chainsaws Importation 2007-2009

BR:BRAZIL

CN:CHINA

DE:GERMANY

JP:JAPAN

SE:SWEDEN

US:U. S. A.

Market conditions

3,822

5,765

2,466

3,122

181

7,996

3,286

6,281

537 889

268

3,628

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

BR:BRAZIL CN:CHINA DE:GERMANY JP:JAPAN SE:SWEDEN US:U. S. A.

CSO Trimmers & Chainsaws Unit Imports 2007-2009

2007

2008

2009

Potential

• While this data also indicates the slow down of the imports

based on the current economic constraints.

• It also paints a picture for potential growth if the conditions are

right.

• As even while the imports of the other brands decreased,

Laughlin & De Gannes has maintained a 10% growth of our

Husqvarna line.

• During this downturn.

Existing Market conditions In Trinidad & Tobago

-40%

-31%

-21%

-6%

3% 10%

DE:GERMANY JP:JAPAN US:U. S. A. BR:BRAZIL CN:CHINA SE:SWEDEN

CSO Trimmers & Chainsaws Import trend as % 2007-2009

Laughlin & De Gannes New Road Map

Proposal

• With the decline of sales within the current economic

constraints, coupled with the need to maintain a higher

degree of visibility via Advertising and Promotion activities

going forward.

• Laughlin & De Gannes is poised to present to Husqvarna new

strategy based on the research conducted.

Re-Focus on Retail

• The new proposal is due to showcase our commitment to

refocus the brand using our retail strength within the Trinidad

& Tobago Market.

• Seeking to maintain the core sales volumes through our TOOL

STORE branches which maintains a strong retail presence

island wide.

• Coupled with our Industrial sales force which has a current

penetration into key sectors of the industry.

• As our previous quest to run parallel dealerships and the

pricing structure which made the trade uncompetitive on both

us and the dealer.

Get the product in the hands of the end

user

• The key to the success of this strategy achieving the volumes

is the proposed revised pricing structure.

• The product is made available to the consumer through our established Laughlin & De Gannes TOOL STORE® three

locations on the island, with a fourth due to be set up next.

• Along with a Husqvarna dedicated sales and service branch.

New Pricing Structure

• Unlike the previous model which needed to provide for the dealer

making a profit.

– Even while said dealer was trying to benefit from the incentives

of the other brands.

• The new pricing structure seeks to pass this directly to the end user.

• Therefore allowing us to focus on moving the product through our

strong retail network with a 20% reduction as an introduction period

realizing increased volume.

Reforecast

-

10,000

20,000

30,000

40,000

50,000

60,000

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

USD Forecast Sales figures 2010 - 2011

2011

2010

2009

Revised sales forecast

• With our current sales forecast we are poised to net US 225K

in product sales in 2010.

• With the new strategy we have outlined we anticipate a 30%

increase in volume.

• In 2011 the long term of the strategy allows us to move up the

margin on the penetration we have made the sales figure is

estimated to grow to US 294K.

Husqvarna product mix at LDGTT

Brushcutters

Chainsaws

Spares and Repairs

Accessories

60%

20%

15%

5%

Summary

• Our strategy to refocus on selling the products through our Laughlin & De Gannes TOOL STORE Retail outlets primarily,

was being proposed to offer Husqvarna before the

unforeseen termination of our dealers commitment which we

initialized just four years ago.

• We would like to have the opportunity to fully explore the

potential of our researched strategy.

• As the way forward for both our interest in the product

success.