Cima Mountaineering - Radford University

Report
Cima Mountaineering
Anna Lucas
Caitrin Dolan
Ashley Taylor
Korey Benton
Liz Williams
Krista McMahon
Outline
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Background
SWOT analysis
Current situation
Key issues
Recommendations
Alternatives
Background
• Hoback Boot Company, founded in
Jackson, Wyoming
• Began as a Western-style boot company
• Inherited from parents (president- Margret
& VP- Anthony)
• Company was refocused to increase
revenues
• 1981 Hoback was renamed to Cima
Mountaineering
SWOT
STRENGTHS
• Test hiking boots on trails
• Discuss marketing strategies to increase profits
and increase sales
• Sales & Profits have grown steadily
• Anthony & Margaret (owners) grew up learning
the boot business
• Quality emphasized throughout product line
• Each line has different styles & features to cover
many of the important uses in the market
SWOT
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WEAKNESSES
Growth has slowed down as a result from
foreign competition & a changing market
Market wants more casual, stylish boot for
weekend hikers
Not much modification to the current boots
Decided not to use mail order catalog
companies
SWOT
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OPPORTUNITIES
Market wants more casual, stylish hiking
boot for a variety of uses
Ideas to extend the line & expand
distribution
Make boots at lower prices
Light weight hiking boot for less
experienced hikers
SWOT
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THREATS
Risk in new line of boots
New boots = new set of marketing,
competitive issues, and financing a new
line
Asolo, Hi-Tec, Salomon, Raichle, Reebok,
Nike, Vasque, and Merrell
Rocky Mountain Sports & Great Western
Outfitters dropped Cima and picked up
their competitors (more to come?!)
Current Situation
• Revenues are increasing but at a slowing rate
• Cima is looking to expand but they can’t decide which
alternative to choose
• Losing business due to high prices
• Competitors are becoming increasingly popular with a
less expensive weekender style of boot
• Cima currently only focuses on more expensive boots for
a medium to advanced level of hiker and climber
• Cima only sells using personal selling to specialty
retailers while their competitors sell through mail order
companies and chain sporting goods stores
Problems
• Distribution
• Price
• Competitors
– Foreign
– Domestic
• Promotion
• Slow to moderate market growth
Problems
• Distribution
– Currently, Cima boots are only distributed in Western
Canada and the Western United States
• Only sell in 10 states in the US
– Cima Mountaineering only sells their boots to retailers
that specialize in mountaineering, backpacking, and
hiking equipment
• Do not use catalogs
• Do not use sporting goods chains
• Do not use internet
Problems
• Competitors
– Foreign
• Foreign companies exporting their boots aggressively into
the United States
• Asolo, Hi-Tec, Salomon, Raichle marketed on performance
and reputation, usually to the mountaineering serious hiker
and weekender segments of the market
– Domestic
• Vasque and Merrell market boots that compete with Cima,
but are offering products for segments of the market where
prospects for growth are better
• Reebok and Nike new entry to boot market-- appearance and
durability of hiking boot with the lightness and fit of athletic
shoes-- expanding into markets that demand lower levels of
performance
Problems
• Price
– Current prices are too high to reach some of
the market
– Losing retailers due to high prices
• Great Western Outfitters replaced Cima with
Merrell due to customers asking for lower-priced
boots
Problems
• Promotion
– Cima needs to expand their promotion techniques
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Personal selling
Print advertising
Trade shows
Point of sale displays
– Only have 10 sales reps
• All independent and sell complementary equipment
– Print advertising is only placed in backpacking
magazines
• Summit, Outside, Backpacker
Problems
• Slow to moderate market growth
– Mountaineers only make up 5% of the market
share and are seen as having slow growth
– Serious hikers make up 17% of the market
share and are seen as having moderate
growth
– They are in no high growth markets and only
reach 22% of the boot market
Key Issue
• How to expand the company in order to
increase growth and keep up with
competitors
– Management is torn on which expansion
approach to take
• Expand existing Line
• Develop new line
Recommendations
• Introduce a less expensive, more versatile “Cima
Weekender” boot
• Lightweight, comfortable, durable, versatile
• Young to middle aged men and women
• Recreational hikers, enjoy outdoors and spending time with
friends and family
• Price range ($80-$100)
• Benefits
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Appeal to a new target market
High potential for growth
Low prices while maintaining quality
Expand distribution
Recommendations
• Increase product distribution of all lines
– Expand throughout the U.S.
– Expand to chain sporting goods stores
• Dicks Sporting Goods
• REI
• Gander Mountain
– Distribute through mail order catalogs
– Distribute through internet
• Allows customers to order on company website
• Allow customers to order through retailer websites
Recommendations
• Increase Promotion
– Advertise on internet
• Create website
– Have list of retailers that sell Cima products
• Hiking Websites
• Trail Websites
• Retailer Websites
– Expand to family-oriented & health magazines
Alternatives
• We Chose not to expand existing boot
lines
• Smaller target market
– Mountaineering and serious hikers only make up 22% of the boot
market
– Weekender boot market makes up 25% of the boot market
• Less growth potential
– Mountaineering is a low growth market
– Serious hiker is a moderate growth market
– Weekender is a high growth market
• Already have multiples styles in those brands
– Have three mountaineering styles
– Have 5 serious hiker styles
• If weekender brand proves successful, they can always
expand their existing boot lines in the future
Questions?

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