Case Study Analysis

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Table of Contents
Introduction2
Situation Analysis2
Mountain Hardwear: the Brand4
Identification of Issues4
Alternative 1: to distribute through REI4
Possible Short Term Issues:4
Possible long term issues:5
Implications for the brand:5
Alternative 2: to not sell through REI6
Possible issues:6
Implications for the brand:7
Recommendations7
Addressing brand dilution7
Addressing relative retailer power8
Implementation8
Resources Required:8
Time frame:8
Performance measurement:9
Conclusion9
References9


Introduction
In 1993, a number of employees in Sierra Design decided to start their own outdoor apparel company. They capitalized on their expertise in the field and with the support of an investor, Ian Cummings they established Mountain Hardwear. Built as an ultra-premium brand focused on elite high altitude mountaineers that would promise uncompromising performance, the company captured a niche market over the next few years. Mountain Hardwear is a classic example of a company that has used various elements of the marketing mix in synergy to build a strong brand. (Spitzer, 2006)

Situation Analysis
A common model used to understand the situation of an organization is the SWOT. This model evaluates internal characteristics –Strengths and Weaknesses as well as external factors which describes opportunities and threats. Below is the SWOT Analysis for Mountain Hardware in the year 1999.

STRENGTHS

Image of being elite and authentic
High product quality
Technical manufacturing skill
Management expertise
High customer satisfaction with the perception the it is a brand that provides uncompromising performance •Loyal customer base
Effective Promotion with a combination of PR and expert endorsement •Strong distribution channel support
Built Strong and valuable relationships
Good financial performance, remained profitable from 1996WEAKNESSES

Niche product portfolio which makes it difficult to spread losses •Niche positioning does not lend itself to product extensions •Limited distribution
Dependent on retail channel support for sales
Nature of business cycle can create cash flow problems

OPPORTUNITIES

Increase market penetration by targeting a larger customer base •Expand into new product categories and diversify
THREATS

Competitors at different price points
Changes in consumer demographics
Financier looking to gain liquidity
In 1999, the brand had consolidated its position as a premium brand with a loyal customer base. So far, indications suggested that the decision not to diversify interests proved to be the strength of the brand. At this juncture, the company is offered the chance to distribute through a large retail outlet, Recreational Equipment Incorporated (REI). (Spitzer, 2006) On one hand, this gives Mountain Hardwear the opportunity to reach a much larger audience. On the other, it has affects the exclusivity that has been the core of the brand. Either of these decisions will have a unique impact on the brand in the short term and the long term. Before looking at the issues that may arise from each alternative, below is an analysis of Mountain Hardwear, the brand. Mountain Hardwear: the Brand

The aim of every company is to build its brand equity; brand equity is “the value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent.” (Kotler & Keller, 2006) There are two sources of brand equity: 1.Awareness – awareness is created by repeated exposure to various brand elements. By sponsoring athletes and ensuring the Mountain Hardwear logo gains visibility, the awareness was enhanced. Extensive use of the logo has made the “nut” a recognizable element of the brand.

2.Image – Brand images are created by relating strong positive associations to the brand. In the case of Mountain Hardwear, the association of being created by people who “knew and...
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