Post on 20-Jan-2023
Individual Case AnalysisJoggers WorldKaitlin Shannon 100881513
BUSI2208-ETuesday, October 22nd, 2013
Table of Contents
Executive SummaryProblem StatementExternal AnalysisInternal AnalysisSegmentationStrategic Alternatives
– 1: “Out of the Comfort Zone”– 2: “Rethinking the Marketing Mix”
– 3: “Back to Square One”RecommendationImplementationConclusionReferencesAppendices
– Appendix A: Internal/External Analysis Table
– Appendix B: Perceptual Map and Segmentation Grid
– Appendix C: Alternative and Criteria Evaluation
– Appendix D: Advertising Options– Appendix E: Cost and Revenue Projections– Appendix F: Implementation Timeline– Appendix G: Declaration of Academic
Integrity
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Executive SummaryJoggers World is currently facing issues regarding its
profit margins and market share. The outlined methods of
potentially solving this problem include “Out of the Comfort
Zone”—using a market development strategy— “Rethinking the
Marketing Mix”—which uses a product development strategy—and
“Back to Square One”—which uses a diversification strategy. The
recommended alternative outlined in this report is the “Out of
the Comfort Zone” strategy. This is due to its ability to satisfy
the low-cost and low-risk criteria, and also due to its potential
in increasing revenues through retargeting. Success in solving
Joggers World’s problems can be achieved by implementing this
strategic alternative—starting with low-cost and cost-free
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promotions, and moving towards community-based events, loyalty
programs, referral bonuses, as well as seasonal promotions to
establish consumer excellence. As well, it is recommended that
Joggers World relocates if/when profit margins increase—to
further increase revenues and also establish locational
excellence. Eventually, its problems can be minimized as Nikki
Brown begins to develop its expertise in management personnel and
retail staff—to strengthen its operational excellence—and also if
she pursues the recommended implementation of switching to a
product development strategy—such as “Rethinking the Marketing
Mix”—once adequate capital is acquired to invest in the further
specialization of current and new goods and services. Overall,
the “Out of the Comfort Zone” strategy is likely to develop
Joggers World’s competitive advantage, far beyond other
alternative strategies, while meeting the company’s objectives
and solving its identified problems.
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Problem Statement After years of booming success, Joggers World’s sales
have deteriorated and its loyal customers are growing older,
therefore not running as frequently— which is problematic as the
number of various methods of obtaining adequate physical activity
is increasing. It is evident that Joggers World needs to find a
solution to regain its market share, in the industry, and also to
increase its profit margins.
External AnalysisDemographic/Geographic
According to the Print Measurement Bureau, the average age
of people who run avidly are between the ages of 20 and 34 years
(Bureau, 2013). As well, 43.4% of the population of the Downtown
area is aged between 20 and 34— which translates to 28% of the
population (Euromonitor International, 2012). In comparison,
22.5%— or 3,300 people— in the Glebe are within that same age
group (GIS Planning, 2013). Due to the greater potential market
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size, this shows that businesses like Joggers World would have
opportunity in relocating downtown, while still maintaining
opportunity in reaching customers in its current location. This
threat, in this, to Joggers World, is that the extent of running
popularity starts to slowly decline between the ages of 35 and
54, and dramatically declines after the age of 55 (Print
Measurment Bureau, 2013). As well, Canadians earning at least
$26,085 are projected to have the financial capability to
purchase products within Joggers World’s price range—middle class
or higher— since personal disposable income in Canada has been
growing in recent years (Yakabuski, 2013). This being said, 76.6%
of people living in the Glebe area are in this bracket, compared
to 71.6% in the downtown area (GIS Planning, 2013). With this in
mind, it is important to consider—regarding opportunities— the
average age of consumers living in each area; since the average
age of consumers is much younger in the downtown area, the
average income should be considerably lower.
Economic Nikki Brown has the opportunity to increase Joggers
World’s profits through the recent incline of the Consumer Price
Index for footwear. In Ontario, the monthly CPI has shown a
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positive 1.7% increase in consumer spending on clothing and
footwear— from August 2012 to August 2013 (Statistics Canada,
2013). As well, Ottawa–Gatineau’s economy is projected to expand
by 0.8 percent in 2013, with both real GDP and job growth
forecasted to reach 1.6 per cent (Dowdall, 2013). This also
creates an opportunity for business owners to increase future
profits, due to the projected growth of income.
NaturalFor regular active individuals, a recent census shows that
64% of Canadians tend to be inactive in the winter, and only 49%
are inactive during the summer (Akhtar-Danesh, 2007). Moreover,
individuals are 86% more likely to engage in physical leisure
activities in the summer than in the winter (Akhtar-Danesh,
2007). This creates a natural threat for Joggers World, since
less people are active during the winter season— and likely to
purchase active wear during those months. However, an opportunity
arises through the ease of advertising during the winter
holidays. According to an article written in the Ottawa citizen,
“even the most dedicated fitness fanatics find themselves out of
synch with their regular workout schedule” during holiday seasons
(Barker, 2011). This means that if Brown can effectively promote
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the importance, either of staying active during the holidays, or
getting active again (after the holidays), this threat of a lack
of physical activity—particularly during the winter months—could
turn into a large opportunity for Joggers World. People would
likely be willing to pay more, as well, since they feel guilty
about the amount of “seasonal goodies” they eat (Barker, 2011).
So, in identifying increases in activity during seasonal shifts,
Joggers World has opportunity in increase its promotions, thereby
attracting new and/or recurring customers who are looking to
purchase running shoes for their exercise.
TechnologicalLarger companies, like Lee Valley, have reached a wider
market segment more efficiently through combining Internet
presence and catalogue operations. These operations allow an
individual to purchase online, print the receipt, skip the line
(by presenting receipt to scan) and receive purchase (Marketing,
2nd Canadian ed., 2009). The absence of this feature is
threatening to companies, like Joggers World, who currently do
not have the capital to implement such operations.
Cultural/Social When evaluating avid runners in Canada, Ottawa is ranked
second (Print Measurment Bureau, 2013). This is opportunistic for
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athletic footwear retail stores, like Joggers World, in
realization of profitability. As well, by offering loyalty
programs— such as loyalty cards, discounts or benefit collections
—companies have the opportunity to earn an extra 17.7% of sales
each year, due to the cultural importance of customer-relations
(Hernandez, 2013). However, a threat to this revolves around the
changes in fitness habits, mainly due to the many cultures that
inhabit Ottawa— cultures that, according to Statistics Canada,
are less likely to be at least moderately active in their leisure
time than Canadians overall and generally prefer other, less
strenuous activities (Statistics Canada, 2006).
PoliticalKeeping Joggers World’s lack of market power in mind, the
Competition Act of Canada ensures that small and medium-sized
enterprises have an equitable opportunity to participate in the
Canadian economy and also to provide consumers with competitive
prices and product choices (Government of Canada, 2010). It is
also important, when assessing its opportunities, within Ottawa,
that Joggers World complies with the Canadian Advertising and
Marketing standards. As Brown has a lack of experience and
expertise in promotions, it is crucial she understands the
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opportunities— outlined in this report (see Appendix A)— while
recognizing the role of the federal government in advertising and
remaining competitive.
Internal AnalysisCore Competencies and Weaknesses
Joggers World’s core competencies are shown through its
ability to remain competitive with a lack of many fundamental
components of most companies. Its strengths are its
specialization of products and industry expertise. Its weaknesses
—a lack of ownership experience and of capital— are largely due
to a lack of attention paid to these fundamental components,
which are likely what holds Joggers World back from its recovery,
and are ultimately what its problems are the result of.
FinanceSales have flattened out after ten years of success
(Joggers, 2013). The lack of experience in owning and operating a
business has become one of Brown’s greatest weaknesses.
Financially, this translates into the lack of knowledge in how to
regain profit margins. There are also many arising financial
issues regarding research and development. For example, Joggers
World currently does not have a website, nor any other form of
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Internet presence (Joggers, 2013). The financial issue in this
matter is that Brown has not had any experience in establishing
and maintaining the recommended Internet presence, nor does she
have the finances to hire the personnel to do so for her
(Joggers, 2013).
Research and DevelopmentJoggers World has strengthened its ability to compete
through the specialization of its products. Recently, it
experimented with high-performance athletic shoes, which are
custom-designed and ordered through another company (Joggers,
2013). If Joggers World continues to communicate the idea that
custom-made running shoes are a strategic buy, this strength
could prove beneficial in positioning. The problem, however, is
that the original company— through which these shoes can be
purchased—has shutdown (Joggers, 2013). Brown’s inexperience
makes her uncertain of how to approach further research into the
development of this product, and also of how to financially
support the only option she identifies—another company, which
requires huge financial investment and promotional expertise
(Joggers, 2013). As well, it is to be considered that if Joggers
World wants to continue with its research and development, it
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requires an online presence—a website or blog— promoting the
order process, through which customers can obtain their shoes
(Joggers, 2013). Its weakness in this, as previously discussed,
is the lack of knowledge and experience to develop a website or
blog to display these products—particularly as Brown is incapable
of doing so herself.
Management/Human ResourcesJoggers World is currently owned and managed by 42-year-old
Nikki Brown, who has no previous experience in owning a business—
yet does all of the Marketing, Human Resources, Finance and
Supply-Chain management herself (Joggers, 2013). This is a major
weakness to the company as even Brown’s lack of experience, in
general, leaves her at a competitive disadvantage against similar
companies in the industry. Indeed, hiring staff in each area of
expertise would help Nikki Brown with this issue, but she would
need the capital to hire these individuals. Having knowledge of
the products being sold—through Brown’s background as a
nationally ranked runner— is a strength for Joggers World, but
there is a lack of management expertise to promote and budget for
further company growth (Joggers, 2013).
Competition
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Another of Joggers World’s main challenges is to regain
market share within its industry. It was recently noted— by the
company’s owner, Nikki Brown— that there are many consumers who
are not serious runners and would prefer more day-to-day, casual
shoes (Joggers, 2013). The weakness arises in comparing Brown’s
knowledge and experience—in the form of service—to that of other
local companies within the Glebe. The Running Room, for example,
offers similar products and provides many other options for its
customers. It has a strong online presence, offering a full
online-store feature— with free shipping— that is easy to
navigate and outlines the many other services—such as running
clinics, sponsored races, community-based fundraisers and career
opportunities—for its cliental (Commercial Design and Multimedia,
2013). So in terms of remaining competitive, Joggers World will
need to take advantage of any evident weaknesses other companies
have. For example, according to critics, the Running Room has a
weakness in setting fair prices—or, at least, in communicating
prices are fair— and in poor customer service. Evidently, Running
Room’s employees are “know-it-alls” and have difficulty in
communicating the benefits of their products to their customers
(R., 2010). In using such information, Brown can strengthen her
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ability to attract customers by developing her customer service
and communication of product benefits and attributes.
Corporate Partners Joggers World is currently in partnership with Nike (Joggers,
2013). The strength, in their partnership, is that Nike provides
marketing and engineering skills that Nikki Brown is unable to
acquire, alone (Joggers, 2013). However, Nike is the only company
that Joggers World is in current partnership with. The company
that initially provided Joggers World with customized running
shoes has shutdown, and Brown’s uncertainty in the investment
required for new corporate partnership—to continue to obtain
customized shoes—has caused this partnership to be at a stand-
still (Joggers, 2013). This being said, although it would be
beneficial to her business to include other companies’ products,
the process would require greater capital investment, which Brown
currently does not have (Joggers, 2013).
Segmentation AnalysisKeeping in mind Joggers World’s main objective is to regain
market share and make continued profits, it is important to
assess its strategy in targeting a segment—through which, it can
meet its objective. The basis for segmenting the market is
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geodemographic, which follows the principal that people who live
in the same neighbourhood, defined by a census enumeration
district, are likely to share similar buying habits (Wordpress,
2012). If Joggers World does not consider the geographic variable
in segmenting, it may lose opportunity in providing a convenient
location for its greatest demographic segment— the frequent
runners who most likely share similar buying habits in acquiring
quality shoes. As well, although the Downtown area's average
income is lower than the Glebe's—also discussed in the external
analysis—it is likely that this is partially due to its
population of younger consumers who, on average, do not make as
much money. Furthermore, the target income level was determined
to be at least middle-class consumers, to account for spending
patterns and the freedom to purchase more expensive products. So
the demographic variable is also important to consider—
particularly in factors such as age, lifestyle and income.
The market will be divided into three segments— serious
runners, casual runners and functional buyers. These segments
will be evaluated in terms of how identifiable, profitable,
reachable and responsive they are as potential target segments.
Serious runners are those who run frequently and who are most
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likely to generate revenue for Joggers World—due to their high
willingness to pay. They are Joggers World’s main consumers for
custom-made shoes, and generally have knowledge in the components
and importance of high-performance running shoes (see Appendix B
for segmentation grid, and Appendix E for revenue projections).
The difference, however, is that although Nikki Brown originally
targeted this segment, she did not consider the geodemographic
variables in targeting. The newly targeted serious runners are
those runners, aged between 20 and 34 years, located in the Glebe
and Downtown areas of Ottawa. In other words, if any of the
chosen segments are to be targeted—as a primary or secondary
target—they need to be assessed in terms of the volume in both
locations, within the specified age group and income level (to be
discussed further within Strategic Alternatives). Casual runners
generally have a lower willingness to pay for their running
shoes, and are also easy to reach with promotions, as they often
run so that they can quickly and effectively improve their
health, while looking for cheap ways to do so, effectively. The
problem with the attractiveness of this segment is that casual
runners are likely to be less responsive than other segments—as
they would only react positively and move towards goods and
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services provided if the products are priced lower. This is a
concern for Joggers World as prices are generally higher, due to
the quality of the shoes—which is of less concern to casual
runners. Functional buyers are those who purchase running shoes
for the purpose of participation in other activities. These
buyers include serious and casual athletes, who often understand
the importance of good performance, brand recognition and use in
many settings. Functional buyers are a large segment of the
market, as there are many physical activities available to
citizens of Ottawa, and are likely to react positively to Joggers
World’s value proposition—as long as it is justifiable through
the performance of the shoes in these activities. They also have
potential as consumers for specialized products through this
understanding of performance.
Through the evaluation of the attractiveness of each
segment, it is evident that Joggers World should target serious
runners as a primary target, and functional buyers as a secondary
target. This is because both serious runners and functional
buyers understand the importance of performance, and are more
likely to move towards specialized products—which Joggers World’s
strengthens its ability to compete with. The main reason casual
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runners are not to be particularly targeted is due to the fact
that in targeting these consumers, Joggers World would face
direct competition by much larger corporations—such as Walmart,
Payless and Winners—who are already succeeding in providing
casual shoes. As well, prices would likely need to be
significantly lowered, and the focus would be shifted away from
its current, most profitable segment—serious runners. To
effectively target these segments, Joggers World should use a
differentiated targeting strategy, overall, communicating the
importance of the quality in performance, while also promoting
customization as a method of obtaining such performance.
The positioning should be implemented by stressing the
products’ attributes and benefits. Using this method, Joggers
World would immediately be able to differentiate itself within
the industry. Its main competitors—such as Running Room, for
example—position themselves through diversifying so to gain
market leadership and stay competitive, offering a variety of
products and services and marketing the quantity, rather than the
quality. For Running Room, this is shown— most prominently—
within its website. On the “Home” page, the main headings include
“family fitness”, “go mobile”—as it has developed an application
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to allow it to be “as mobile as you are”—as well as a “store”
feature, with products available for purchase (Commercial Design
and Multimedia, 2013). So, if Joggers World is able to focus on
marketing its products’ attributes and benefits, it will be able
to build on its specialization strength, therefore increasing its
ability to compete.
Strategic Alternatives“Out of the Comfort Zone”
One possible solution to Joggers World’s deteriorating sales
and increased competition is to follow a market
development strategy— expanding the potential market through the
targeting of new users (TheProduct.com, 2013). In this
alternative, these new users—serious runners and functional
buyers— are found through a geodemographic basis for
segmentation. These target segments can expand sales through new
uses for Joggers World’s current shoes (see Appendix E for
revenue projections). The geodemographic variable identifies—as
explained in the Segmentation Analysis—that serious runners and
functional buyers should be identified on the basis of age—
between the ages of 20 and 24—location— downtown is most
preferable—and income—middle-class or higher— which translates
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into the lifestyle and purchasing power that consumers have,
which helps Joggers World meet its goals (Euromonitor
International, 2012).
To attempt in reaching the target segment, Joggers World would
need to consider relocating. Its current location is in the
Glebe, which was (previously discussed in the External Analysis)
discovered to have a smaller population of the runners in the
targeted age range than the Downtown area. As well, although the
Downtown area's average income level is not as high as the
Glebe's, it still satisfies this target income bracket.
Unfortunately, the setback of this alternative lies in the
opportunity of increased sales through relocating. Although it
would be beneficial in its potential to generate even more
revenues, there is no evidence to suggest that Joggers World will
have the capital or expertise required to budget for relocating,
at this time. As the Downtown area is most opportunistic for
companies in many industries, it requires more capital to acquire
the space needed for business. Therefore, if this alternative is
chosen, it is recommended that Joggers World begins
implementation by coming up with low-budget strategies to promote
its products’ benefits. If this is successful, Joggers World
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should then shift its focus to researching and acquiring enough
capital so to relocate in the Downtown area. However, this would
also require more time.
“Rethinking the Marketing Mix in the Glebe”The second, alternative solution to Joggers World’s
deteriorating sales and increased competition is to follow a
product development strategy, through changing its products in
some way, in hopes of increasing sales and profit margins, and
meeting the needs of its current target consumers
(TheProduct.com, 2013). In this alternative, Joggers World does
not concern itself with relocation costs, and focuses its
attention on its main strengths of specialization and industry
expertise. Considering Nikki Brown is a nationally ranked runner,
she has the opportunity to use her skills in developing various
services to further satisfy her loyal customers. This also gives
Joggers World the opportunity to strengthen its diversity of
specialized products, which would only help in the positioning
process (see Appendix B for a perceptual map of its current
products). The problem with this alternative is that Nikki Brown
is currently the only manager, in charge of all operations for
Joggers World. This includes, but is not limited to, Human
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Resources, Finance, R&D, and Supply-chain management. With a lack
of experience in owning and operating a business, and a lack of
capital for investment in new expertise, Nikki Brown is limited
in her ability to effectively develop the specialization of the
goods and services offered by Joggers World. As well, Joggers
World’s current target segment is aging, causing the
deterioration in sales—as many have been switching to other, less
demanding exercise programs. Due to the age and lack of
commitment shown by this currently targeted market segment,
Joggers World’s attempt to develop its products may not succeed,
if at all, as effectively as it would if Nikki Brown retargeted
towards a younger, more responsive segment. So, if this
alternative were to be chosen, it is recommended that Joggers
World build strong customer relations with its current, loyal
customers—in hopes of at least maintaining current profit margins
—while developing new services and perhaps developing
partnerships with other corporations. This being said, Joggers
World may find it beneficial to build on its corporate
partnership with Nike, particularly in the specialization of its
stock of running shoes. Currently, Nikki Brown is uncertain about
her partnership with a new company—which supplies customized
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running shoes—that requires more promotion investment and also
investment in training employees. By, instead, developing a
strong partnership with Nike (see Appendix E for its customized
and specialized shoes offered), Joggers World could save a lot of
money— money that, instead, can be spent on other aspects of
product development.
“Back to Square One”The third alternative to solving Joggers World’s main problems is
to implement a product diversification strategy, through the
modification of its current products for the purpose of expanding
the potential market (TheProduct.com, 2013). This is done through
brand extensions or partnership with new brands, while targeting
a new segment of the market, also based on geodemographic
variables. This would allow Joggers World to increase its
strength of specialization in its products, while maximizing its
potential to reach targeted consumers who are most likely to
accept Joggers World’s value proposition. Indeed, in retargeting
and rethinking the goods and services available for sale, Joggers
World has the opportunity to increase its profit margins quickly
and effectively. The problem, again, lies in the lack of capital
available for implementing this alternative. As well, the
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research required to successfully modify its products—to meet the
needs of this new target market—may be problematic for Nikki
Brown, as she is currently the only person managing Joggers
World. She is inexperienced in business ownership and likely does
not have the capital required to hire someone—as she is already
concerned with the capital required in promoting her current
products. If she were to attempt to develop Joggers World’s
products, alone, she risks losing her current, loyal customers in
her targeting of new customers—particularly as she may find
herself in direct competition with much larger firms, who have
more market control and purchasing power. It is recommended—if
this alternative is selected—that Joggers World begins
implementation by retargeting to a younger segment of consumers—
specifically, serious runners and functional buyers—and focus on
acquiring the capital to hire R&D personnel, who can then shift
the company’s focus to developing more specialized goods and
services. It is also recommended that, if this is truly
successful in increasing its profit margins, Joggers World should
relocate to the Downtown area.
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RecommendationThe criteria, used in selecting a strategic alternative to
implement, included being low-cost, low-risk and have the most
growth potential—within a reasonable time range— for Joggers
World’s effective recovery (see Appendix C for criteria
evaluation). It was determined, through the evaluation of each
alternative—with these criteria in mind—that the “Out of the
Comfort Zone” strategy best supports Joggers World’s objective to
quickly regain market share and increase profit margins (see
Appendix C for evaluation table). This is mainly because it
allows Joggers World to quickly generate more revenues and
increase profit margins, before looking into R&D projects, as it
identifies a new, more profitable segment to target. This
alternative is also less risky for Joggers World, since it is
most stable in generating revenues to acquire enough capital to
proceed in the development of its products and/or in the process
of relocation. As well, the “Out of the Comfort Zone” strategy
would increase Joggers World’s core competencies of
specialization and industry expertise—as it creates the
opportunity for Joggers World to target those consumers who
understand and respond positively to quality and high-performance
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shoes—while minimizing the external threat of being impacted by a
loss of customers—customers who Brown worries demand more casual
footwear. The only real downside to this alternative is the time
required in implementation. Since one of Nikki Brown’s main
weaknesses is her lack of capital for investment, Joggers World
will need to first focus on regaining market share and increasing
its revenues. This means it will need to allocate much time
before even thinking of developing further—be it through
relocation, promotions, and/or acquiring new management personnel
(see Appendix E). This being said, since Joggers World simply
does not have the capital nor management expertise to further
develop its products, while targeting a new segment of the
market, it would not be beneficial to select the “Back to Square
One” strategy. Furthermore, the “Rethinking the Marketing Mix in
the Glebe” strategy is far too unstable in the attempt to
increase profit margins and regain market share—it focuses on the
development of specialized products, but does not consider the
extent of success while targeting an aging, less serious segment
of consumers who may find these specialized products too
expensive.
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ImplementationIn targeting a new market segment, Joggers World is more
effectively able to communicate value to its customers—as these
newly targeted consumers are more adequate in their ability to
understand and appreciate the value in specialized and customized
athletic footwear. Joggers World would do well, initially, in
focusing on communicating the benefits in the attributes of
customized/specialized shoes. It would be best to keep record of
which products are sold most and use leader pricing as a tactic
to build store traffic. Overall, prices should not change
significantly from their current levels. This is because the
newly targeted consumers will likely be more responsive and
reachable than Joggers World’s original target market segment—
thereby being more accepting of Brown’s value proposition.
Methods of ensuring Joggers World’s product-value is
communicated to consumers may require investment capital towards
advertising. However, with the extent of industry expertise that
Nikki Brown has (as a ranked runner), it would be advantageous to
build relationships through education, while implementing low-
cost and cost-free promotions through mediums popular with the
younger, target segment (see Appendix D for some options). These
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relationships would need to develop over time, but a consistent
effort can create much credibility and trust—while remaining low-
cost for Brown’s budget-sensitive marketing plan (see Appendix F
for a timeline). A good way to start is to create tip sheets on
running and long-term health— this could be a one or two-sided
piece of paper, filled with helpful tips from Nikki Brown, the
expert. It is recommended that Joggers World’s logo and business
information is also put somewhere on these sheets. As well, Brown
can easily offer a free running clinic for in-person advisory.
This can be promoted through talking to existing clients, by
printing flyers and using social media tools—such as Facebook,
Twitter, and the online Ottawa Events Calendar. If she is able to
draw in enough attention by participants, Nikki Brown will have
the opportunity to promote her products through her knowledge of
high-performance running shoes—particularly the ones she carries
in-stock at Joggers World. The use of area expertise in
promotions will likely prove beneficial to existing customers,
while also attracting the attention of the new, target segment of
consumers—who appreciate the benefits, other than just the shoes
they are looking for, to shopping at Joggers World. Indeed,
people like benefits and bonuses, so getting tips and other free
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extras in their purchase may serve Brown well in gaining new,
loyal customers within the newly targeted segment. This being
said, it would also be advantageous to create a referral program
for existing customers—customers that have been loyal in keeping
Joggers World a profitable company. These referral programs could
offer free products, coupons for products, or other rewards for
every new customer sent to shop at Joggers World. As well, hand-
written thank you notes are an effective way of appreciating and
building long-term customers.
Over the next year, Joggers World should focus its efforts
on leverage. Joining the local chamber of commerce to network and
attend meetings and events can connect Joggers World with other
business professionals that it can build corporate partnerships
with, down the road. Sponsoring a local event can also give
Joggers World free visibility and the chance to meet influential
community members, who might be able to help with the growth of
the company, later on. Most of all, being civically active is
good, capital-free publicity in itself because it shows
commitment to the community.
Success depends on the extent to which these events are
creative, organized, and effective in targeting the right
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consumers. For Joggers World, one example of a local event is a
contest—perhaps an obstacle course, marathon or some other, fun,
community event that will draw in attention from the younger
target segment of serious runners and functional buyers in
Ottawa. If promoted well, events like these would encourage
participation by runners in many regions in Ottawa, and this
would also give Joggers World the opportunity to attract
customers from the casual runners segment, which would just serve
as extra revenues for the company.
Success also depends on leveraging each press release, each
article and each published mention. For now, it can all be put—
cost-free— on a Facebook page, a Twitter page, or both— a news
page that Brown can update with promotions, events and other
quirky attention-grabbers that customers can keep updated on. It
is crucial that Nikki Brown promotes these pages as much as she
updates them, perhaps by creating signs or posters, which can be
placed around the store—by the cash, for example—and also by
mentioning these pages, consistently, to clients, colleagues and
other professional organizations. There are also other options,
like enlightenedapps— which provide free mobile advertising (see
Appendix E)— and in developing seasonal bonuses—to establish
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itself as a beneficial, go-to destination for consumers, year-
round.
Down the road, projected profit margins and market share
suggest that Joggers World will be able to focus on developing a
competitive advantage. As mentioned in the External Analysis, the
locational excellence can be achieved by reaching the greatest
volume of Joggers World’s primary segment, in the Downtown area.
Although it may be expensive, since the Downtown area is most
convenient for businesses to reach their consumers, there are
options available (see Appendix E). Relocating is highly
recommended, as it will help to place Joggers World’s products
more efficiently. Changing the name of the store, however, is not
recommended. This would just confuse existing customers, and is
not guaranteed to draw-in new ones. It is, instead, recommended
that Nikki Brown develops a creative slogan and considers
switching to a product development strategy—such as “Rethinking
the Marketing Mix”, once enough investment capital and/or
management expertise is acquired— to develop its product
excellence and support positioning. This slogan could be
something such as “Your life. Your way.” Both of which emphasize
the extent to which Joggers World’s products tailors to the
31
customers’ individual needs—thereby supporting its strength of
specialization.
ConclusionIn summary, the evaluation of attractiveness in the main
segments—using geodemographic variables as bases for segmentation
—suggest that Joggers World should retarget its efforts towards a
younger group of serious runners, who should—if promotions are
effective—allow Joggers World to regain market share and increase
its profit margins. Through this increase in capital, it is
recommended that Nikki Brown invests in developing her
specialized offered goods and services, in acquiring a new team
of management expertise and also in relocating to the Downtown
area.
32
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Appendix AInternal/External Analysis Table
Positive NegativeInternal Strengths
Specialization of products Industry expertise
High-performance running shoes Owner has much credibility in
advisory (ranked runner) Ability to easily establish
more specialized G&S for customers
Knowledge of products sold Ability to promote on the
basis of benefits and attributes of products available
Partnership with Nike
Weaknesses Lack of capital Lack of ownership/management
experience
Lack of knowledge in regaining profit margins
R&D funding Lack of R&D expertise Lack of capital to hire expertise Much uncertainty Lack of marketing/promotions
experience Lack of variety of products (eg.
Casual footwear)
External Opportunities Downtown area—high-volume of
younger runners Younger runners Middle-class or higher CPI shows positive spending on
footwear GDP and job growth Holidays—increased demand for
physical activity Social trends supporting avid
running Cultural importance of
customer relations—low-cost and ability to generate revenues
Threats Older runners—running less Glebe—competition and age of consumers Inactivity in winter season Competitors with online presence and
online-store features Market power of larger companies,
affecting social attitudes Cultural trends in activity—lower
levels, in general, and prefer other, less strenuous activities
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Appendix B1) Perceptual Map
**Note: The limitation to this perceptual map is due to a lack ofadequate analyses, in terms of conducting a survey to obtain adequate data— data that would allow this perceptual map to accurately place companies in the spectrum. There were no numbersgiven in the case analysis to compare to that of other competitors, so many assumptions were made.
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2) Segmentation GridDemand for Products Cheap
(<$100)Regular
($100-$150)Specialized($150-$200)
Custom($200+)
Casual Runners P SFunctional Buyers S P SSerious Runners S P P
P represents primary target purchaseS represents secondary target purchase
Appendix C1) Alternative EvaluationStrategicAlternativ
e/DecisionFactor
FinancialImplicatio
ns
Time to FullImplementation
R&Dand/or
Expertise
Required
RiskRank
CostRank
Out of theComfortZone
-Can be expensive if relocating-Not expensive, otherwise, as there are manylow-cost methods of advertising (see Appendix B)
- Long process of relocating
- Quick, easy way to gain more revenues/profits
- Real estate- Promotions (Marketing expert)
2 3
Rethinkingthe
MarketingMix
- RequiresR&D investmentcapital (expensive)
- No need for relocation- Long process ofdeveloping and/or acquiring new products
-Promotions-R&D-Finance-Risky for inexperienced managers
3 3
-Requires R&D investment
- Long process of relocating
-Real estate
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Back toSquare One
capital (expensive)-Would also beconsidering relocating andnew methods ofadvertisement (expensive)
- Long process of developing and/or acquiring new products
-Promotions-R&D-Finance
4 4
Risk Rank- 1 = low risk, 5 = high riskCost Rank- 1 = low cost, 5 = high cost
2) Criteria Evaluation
Note: Criteria are ranked on a scale between 1 and 10—10 being adequately met, the best.
Appendix DAdvertising Options
Rate Source
Bracelets(Promotions)
- $1000 (for 100 bracelets)- Order merchandise, such as this, to give
away and/or sell to customers.- Bracelets have logo on front, slogan on
back and website on the inside- Option: could give away for loyalty
programs and sell to infrequent customers
(1InchBracelets,
2013)
Facebook- $350 for one year- Budget for a specific audience of users (Facebook ,
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Criteria Weight Out of theComfort Zone
Rethinking the Marketing Mix
Back to Square One
Low in cost 0.3 7 7 5
Low-risk 0.4 8 5 7
Growth Potential 0.2 8 8 9
Time Required 0.1 4 5 3
Total(criteria x
1.0 7.3 6.2 6.4
Advertising - Based on interests, hobbies, etc.
CARDonline
1. E-newsletter – distributed to an engaged audience of over 15,000 readers - Listing Highlight (250-300 words, 2images) = $2000 - Leaderboard (728 x 90) = $1500 - Big Box (300 x 250)= $10002. Logo (search results page & listing page)= $1120
(CARDonline,2013)
Yellow Pages1. Online listing (cost-free)2. Go digital (starter package, including a
website and HD video, includes online listing) =$90/month
(Yellow Pages, 2013)
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Appendix E1) Costs
Options Description Rate Source
Potential Relocation Space
Property Type: Retail, OfficeLocation: Central (Downtown Ottawa/ ByWard Market)Address: 1 Nicholas St.
- Suite 200 (Retail option, private elevator access)
- Square Feet: 1500- Rent: $17/sq.ft. =
$212,500
(Zinati,2008)
NIKE Custom Shoes
Order custom-made shoes from current corporate partner, insteadof going throughan external company
- Likely much less than the company Nikki Brown is currently looking into partnering with—particularly since Nike does not require training forstaff, which lowers the cost to Brown, significantly.
- Price range similar to general-sized, specialized shoes (so between $100-$200, on average, per shoe)
- Note: Shipping is free when purchase more than $75 worth of shoes
NIKEiD FlashRunning Shoes
— (Nike,2013)
Nike Specialized Shoes—Neutral
Superior Cushioning for asmooth ride—specialized for
$150-$200 (per shoe) (Nike, 2013)
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Ride consumers looking for comfort
Nike Specialized Shoes— Trail
Low-profile cushioning and traction—specialized for consumers looking to hike and/or train on other terrains
$100-$150 (per shoe) (Nike, 2013)
Nike Specialized Shoes— Racing
Designed to compete at high speeds—specialized for consumers looking to use for functional purposes like racing
$50-150 (per shoe) (Nike, 2013)
Nike Specialized Shoes— Barefoot-Like
Lightweight and flexible—specialized for people who are looking for a light shoe
$175 (per shoe) (Nike, 2013)
Running Clinics—Running Room’s 10k Training Clinic
This training program is designed to prepare you for a 10K event.
$50-$100 (per shoe) (Stanton,2013)
Enlightenedapps
- Mobile website development
- Mobile app. development
- Mobile advertisements
- Mobile Ads: A professional Photoshop designed company banner included FREE!
- Mobile App: estimated quote of $500 for an app with a store
(Enlightenedapps, 2013)
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feature, a location—on a map— feature,a consistently-updated events pagefeature and a tip-sheet feature)
Appendix E2) Revenues
44
45
Service Serious Runners Casual Runners FunctionalBuyers
Clinics - Most likely the segment that would utilize this service most, generating revenue equal to the cost per clinic multiplied by the amount of serious runners Joggers World is able to effectively reach
- Eg. $100x60runners/month=$6000/month
- Likely to usethis service, casually. Revenues generated woulddepend greatly on the effective marketing of these clinics, proving beneficial and useful to casual runners
- Eg.$100x10runners/month=$1000/month
- Likely to generate revenues if consumers in this segment are training for something that this service can train them for(eg. Tough Mudder)
- Eg.$100x30runners/month=$3000/month
SpecializedShoes
- Very likely togenerate high revenues, if staff is able to communicatethe benefits of what an individual considers comfortable
- Eg.$150/shoe x 150sold=$22500
- Not likely to generate much revenue, unlessindividual consumers are concerned with comfort and arewilling to pay more for it
- Eg.$150/shoe x 25sold=$3750
- Very likely togenerate revenues if staff communicates benefits of comfort in application tofunctional use
- Eg.$150/shoe x 100sold=$15000
Custom Shoes (Switch to Nike)
- Very likely togenerate high revenues, as long as staff communicates how customizedattributes are
- Not likely to generate much revenue; usually priced higher and casual runners generally have
- Likely to generate moderate amountof revenues, depending on the extent to which he
Appendix FImplementation Timeline
TodayEstablish online presence (ie. Facebook, Twitter)Make use of industry expertise (eg. tips and advisory)Referral benefitsLoyalty Programs
Within The YearRemain consistant with benefits and loyalty rogramsContinue to make use of industry expertiseNetworkSponsor local eventsProper website or more efficient use of social media (established initially)Take advantage of other, cost-free promotional opportunities, like mobile applicationsSeasonal prices and offers
Long-TermContinue all initial efforts; perhaps consider acquiring personnel to do so in order to increase Brown's efficiencyWork on acquiring enough capital to relocateDevelop a catchy slogan for positioningThink about switching to a product development strategy, once profit margins are adequately increased enough to hire new management (specifically R&D) personnel
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Appendix GDeclaration of Academic Integrity
1
Declaration of Academic Integrity
Course: BUSI 2208 ETerm and year: Fall 2013Title of case analysis: Joggers World Case AnalysisAssignment No.: 1
The University Senate defines plagiarism in the regulations on instructional offenses as, “to use and pass off as one’s own ideaor product work of another without expressly giving credit to another.”
Borrowing someone else’s answers, unauthorized possession of tests or answers to tests, or possession of material designed in answering exam questions, are also subject to university policy regarding instructional offenses.
Photocopying substantial portions of a textbook (e.g. more than 1chapter or 15% of the total page count) without the publisher's permission is another misuse of intellectual property, and is also a violation of Canadian copyright law. Access Canada's web
47
site provides guidelines on legitimate copying.
I/we declare that the work submitted herewith is my/our work. Allsources have been referenced in the footnotes, endnotes or bibliography. This work has not been shared with anyone outside this group, except where appropriate with the company involved inthe Comprehensive Group Project.
Please print Name andStudent ID clearly
Signature of student Everyone must sign to receive a
grade
Student Name: Kaitlin ShannonStudent ID: 100881513
Instructional offence cases must be referred to the Associate Dean (Undergraduate Studies); individual solutions are not permitted.
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