Cima Mountaineering

Anna Lucas Caitrin Dolan Ashley Taylor Korey Benton Liz Williams Krista McMahon

Outline

• • • • • • 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

• • • 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

• • • 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

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 • • • • 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

• • 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?