Marketing Case Analysis

MKTG 101 – Principles of Marketing

Section 5

Professor Bruce Wilson

Case 10

Joggers Universe

Individual Case

Prepared by:

Vaccarezza, Andrew M

May 17, 2007

EXECUTIVE SUMMARY 3

BACKGROUND 3

COMPETITION 3

PRODUCT LINE 3

CONCERNS 3

POSSIBLE RESOLUTIONS 4

MAJOR RELEVANT ISSUES 4

NEW PRODUCT LINE 4

Problems 4

Gains 4

New Website 4

Sales Territory 4

Relevant History 5

CUSTOMER BASE 5

CENTRAL PROBLEM 5

Product 5

Promotion 5

Price 5

Place 6

IMPLICATIONS ARISING FROM THE PROBLEM 6

FINANCE 6

PRODUCT 6

MARKET TRENDS 6

RISK OF NOT ACTING 6

ALTERNATIVE SOLUTIONS 6

NEW PRODUCT LINES 6

EXPANSION 7

RECOMMENDED SOLUTION 7

PRODUCT 7

EXPANDING 7

Executive Summary

Background

Jogger’s Universe is a 20 year old retail outlet with its main product focus on running shoes. Jogger’s Universe is owned and managed by Sue Koenig a 42 year old professional runner. Starting from scratch in 1987, Sue has turned Jogger’s Universe into a profitable and professional business selling high quality specialized running shoes.

When Sue started Jogger’s Universe she focused on Nike shoes which were seen as top quality. Nike shoes presented Jogger’s Universe with a five to seven dollar profit per sale and a high sales volume which resulted in attractive profits for Sue.

Competition

Business was more then expected for Sue during the first decade of Jogger's Universe. However, recently other chains like Footlocker and Wal-Mart have introduced themselves into the market selling similar shoe lines as Sue at lower cost to the customer. Although some quality aspects are missing from these new competitors, a lower price seems attractive to most consumers.

These new competitors are creating lower profit margins for Sue due to her having to lower her prices, thus cutting into her profit margin in order to stay competitive. However, Jogger’s Universe competitors are growing in numbers. These competitors cannot offer Sue’s experience in the sport of running, which has helped her maintain some customers who are among the few running enthusiasts.

Product Line

Sue is seeking to expand her line of products in an effort to expand her advantage in marketing to runners in need of goods and professional guidance. Sue has recently found a high performance shoe which promises good profit margins and could give her the edge she has thriving for. However, Sue is partial to taking on this new line due to the up front cost.

Although this new shoe shows great quality and profit margins, she would need to send every sales associate to a special training session for two days. These training sessions are free but the traveling expenses and other related expenses add up quick. This is showing to be a high risk decision Sue will soon be forced to make.

Concerns

Sue is faced with many product decisions and her strongest opportunity is a high performance running shoe. However, Sue is uncertain of the current market and its need for a high performance running shoe.

The main issue at