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.

48