MBA 646GROUP 2

New Product Development & Marketing plan: “Columbia” Snowboards

Corporate Development and Strategies: Alexey TsukanovProduct Development & Research: Fabricio SchnorembergerProduct Augmentation and Communication: Aygun Suleymanova

Company History:Founded 1937 by Paul and Marie Lamfrom in Portland, Oregon. Began as a small hat distributor but quickly expanded into outerwear, sportswear, footwear, accessories, and equipment. Columbia Sportswear Commercial

Mission Statement:“Columbia Sportswear outfits outdoor enthusiasts with unmatched performance and advanced technology from head to toe with outerwear, sportswear, footwear, and accessories”

Key competitors: The North Face, Patagonia, Timberland

Industry BackgroundApparel Manufacturing Industry, (subsector Outerwear Manufacturing)$7.2 Billion, 6% growth - 2006

COMPANY AND INDUSTRY BACKGROUND

2007 2006 2005 2004 2003

Net Sales $1,356,039 $1,287,672 $1,555,791 $1,095,307 $951,786

Net Income $144,452 $123,018 $130,736 $138,624 $120,121

Our recommendation is to expand into sports equipment industry by offering a full line of snowboards and snowboard equipment.

This strategy fits with Columbia’s mission statement of offering high quality “head to toe” products for outdoor enthusiasts.

COMPETITIVE ENVIRONMENT

IndustryRivalry: Medium. Products are interchangeableNumerous established competitors

Supplier Power: Low.Raw materials (wood) are plentiful, no threatof forward integration.

Buyer Power: Low.products sold through many smaller retailers withlimited bargaining power.

Threat of Entry: Low. High BrandAwareness, economies of scale.

Substitutes: Medium. Other extreme sports such as mountainbiking, climbing, etc

Sports Equipment Industry Five Force Analysis

SPORTS EQUIPMENT INDUSTRY

BroadMarket

Narrow Market

Cost Leadership Differentiation

Burton*Columbia*

Mash

AtomicEmpire

- Sports Equipment is a $25 billion industry. Snowboarding subcategory of the Sports Equipment Industry is a $500 million industry.

- Very high growth rate. Customer base has increased from 2.5 million in mid 90’s to over 5 million today.

- More than half of the market share is owned by Burtons Snowboards.

-Opportunity exists for a high quality snowboards offered to a broad market

SWOT ANALYSIS

Strengths: - Strong brand-name that is synonymous with quality and durability- Healthy financials- Innovative marketing -Reputation as an eco-friendly company

Weaknesses:- Slowdown in revenue growth due to increased costs and increased competition- International expansion has not been very successful

Opportunities: -Very fast growing industry- Strong demand for high quality, durable products- Emerging markets show good future potential

Threats:-Economic slowdown may negatively affect demand- Unpredictable seasonality and warmer winters may reduce demand- Burton Snowboards is a very strong competitor

EXPANSION AND GROWTH STRATEGY- Columbia’s strategic growth entails expanding product offering for every outdoor segment

- Our recommendation is to acquire a premium snowboard manufacturer and market their products under Columbia brand

Market Planning

SEGMENTATION AND TARGETING

Segment: regular snowboarders-practitioners Size: 7.1 million Growth rate: 30% Access to segment: accessible Geographic concentration: US and Europe Emotional motives: high Company fit & ease of business Other business opportunities provided by the

segment: immersion in extreme-sports!

TARGETING…

Target market:

teenager and adult regular practitioners of

snowboarding (amateurs and pros) in the United States.

TARGET MARKET SELECTION: PRODUCT SPECIALIZATION

Demographics  most snowboarders are 12-to-24-year-olds females make up roughly 25 percent

Geographic targeting: US (38 states) Social/cultural influences  inspired by surfing and skateboarding came to rebel the more sophisticated way of skiing Snowboarders stereotypes: "lazy", "grungy", "punk", "stoners", "troublemakers"  Purchasing behavior: high appealing durable good  less frequent purchases greater consumer investment more intensive personal selling

Differentiation & Positioning

BRAND DIFFERENTIATION STRATEGY

Columbia conveys functionality, durability and high quality associated with active, healthy lifestyle brand extension opportunity: positive consumer

expectations, retailer support, leverage current brand awareness, and reduced cost of the launch campaign

BRAND POSITIONING STRATEGY

Create the perception of high value-added product Association with Columbia’s points-of-parity

Goals & Objectives

TACTICAL MARKETING GOALS  Achieve market share large enough to consolidate the new product line

as a strong competitor in the market. Create an association of snowboarding equipments and Columbia’s

name inside the target audience’s minds. Making Columbia’s snowboards available and reachable for any

American customer. Convey a high-quality message about the new product line to the target

audience.

TACTICAL MARKETING OBJECTIVES

Achieve 5% of market share in revenue measure ($24.4M annual sales) in the second year.

Sponsor 2 of the 5 best snowboarding professionals in the United States at the end of 1 year.

Sponsor at least 2 major US snowboarding competitions at the end of 1 year.

Having snowboards available in all states where snowboarding resorts are popular at the end of 1 year.

Reach superior product performance indicators than any industry competitor in 1 year

Core Product Strategy

CORE : a board that slides on snow

BASIC: shape with front and back upturned

EXPECTED: high speed and agility; no scratches, and graphics printed on

both sides.

AUGMENTED: 3-years warranty; free engraving; option to customize

POTENTIAL: boards made of lighter materials, such as titanium, aluminum, or carbon fiber.

…Benefits

CORE PRODUCT STRATEGY (CONTINUED)

Performance  high performance levels constantly assessed: indoor, in a science lab; and outdoor,

a team of pros and amateurs will take the boards to the slopes and subject them to different riding styles and terrains

  Price-value-quality relationship

both amateurs and professionals it is imperative to deliver a high value-added product

practice of higher prices than the average of competition

Augmentation

Brand name Logo design Warranty Package trade dress Customer Relationship Building programs Customer Service requirements Trade-in; Financing On-line community building plan Other augmentation

› Engraving› Customization

Price Strategy & Policy

Price-quality-value relationship Buyer’s perception Influences on price Pricing Policy Pricing objective

Recommended list price - $479 - $499 Price adaptation

Supply-Chain and Channel Decisions

Distribution requirements demanded by the target market

Distribution intensity policy Channel path selection Supply-chain partners’ selection Channel diplomacy Reseller program

COMMUNICATING VALUE

Target audience profile: Channels to be used

› On-line; › Colleges; › Snow resort regions

Geographic coverage Frequency Key Messages:

› BOARD WITH PLEASURE› BOARD TO EXTREMES› EXPRESS YOURSELF› FEEL AND SHOW… QUALITY BOARDING

Pro

Pro