Surfside: Marketing and Gross Profit Calculation
Surfside Leisurescapes
This report is consistent with my signed Academic Integrity form on file with the instructor.
May 23, 2013
Surfside Leisurescapes|Page 1
Critical Issues
Surfside Leisurescape (SL) lacks a marketing strategy in place to thrive and to differentiate itself in the competitive hot tub market of Newmarket, which has resulted to a continual decline of sales in the company’s hot tub division.
Situation Analysis
SL’s hot tub division must develop a comprehensive marketing strategy in order to differentiate their products and company brand amongst the competitive hot tub market in Newmarket, Ontario. SL’s lack of marketing strategy has caused the hot tub division to decline in sales by losing potential customers to its new competitors. The average profit margin for SL’s hot tub division is 37.56%, with a 55.04% profit margin for Jacuzzi and a 39.30% profit margin for Pacific (Over the last 6 years from 1999-2005)(see Exhibit 6 – Jacuzzi Sales Breakdown 2004 & Exhibit 7 – Pacific Sales Breakdown 2004). SL’s weakness is its lack of marketing strategy; and its strength is that they had the first mover advantage in the hot tub market, which has given them a respected reputation in the community (see Exhibit 5 – Competitor Assessment). SL should focus their resources on targeting the “quality-conscious” and “dealer/brand loyalty” customers due to the company’s decent reputation in the community. The entry barrier to enter the hot tub market is low and there are three direct competitors that sell a similar product to the same target customers (see Exhibit 3 – Porter’s Five Forces Model). Management needs to reposition their product lines and use the most effective promotional medium in order to differentiate itself from their competitors and increase its sales in the hot tub division.
Decision Criteria
Implement a strategic marketing campaign that will increase the gross profit of the hot tub division by 3.75%1 in one year (January
This report is consistent with my signed Academic Integrity form on file with the instructor.
May 23, 2013
Surfside Leisurescapes|Page 1
Critical Issues
Surfside Leisurescape (SL) lacks a marketing strategy in place to thrive and to differentiate itself in the competitive hot tub market of Newmarket, which has resulted to a continual decline of sales in the company’s hot tub division.
Situation Analysis
SL’s hot tub division must develop a comprehensive marketing strategy in order to differentiate their products and company brand amongst the competitive hot tub market in Newmarket, Ontario. SL’s lack of marketing strategy has caused the hot tub division to decline in sales by losing potential customers to its new competitors. The average profit margin for SL’s hot tub division is 37.56%, with a 55.04% profit margin for Jacuzzi and a 39.30% profit margin for Pacific (Over the last 6 years from 1999-2005)(see Exhibit 6 – Jacuzzi Sales Breakdown 2004 & Exhibit 7 – Pacific Sales Breakdown 2004). SL’s weakness is its lack of marketing strategy; and its strength is that they had the first mover advantage in the hot tub market, which has given them a respected reputation in the community (see Exhibit 5 – Competitor Assessment). SL should focus their resources on targeting the “quality-conscious” and “dealer/brand loyalty” customers due to the company’s decent reputation in the community. The entry barrier to enter the hot tub market is low and there are three direct competitors that sell a similar product to the same target customers (see Exhibit 3 – Porter’s Five Forces Model). Management needs to reposition their product lines and use the most effective promotional medium in order to differentiate itself from their competitors and increase its sales in the hot tub division.
Decision Criteria
Implement a strategic marketing campaign that will increase the gross profit of the hot tub division by 3.75%1 in one year (January
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