1.0 Executive Summary Pegasus Sports International is a start-up aftermarket inline skating accessory manufacturer. In addition to...
Question:
1.0 Executive Summary
Pegasus Sports International is a start-up aftermarket inline skating accessory manufacturer. In addition to the aftermarket products, Pegasus is developing SkateTours, a service that takes clients out, in conjunction with a local skate shop, and provides them with an afternoon of skating using inline skates and some of Pegasus’ other accessories such as SkateSails. The aftermarket skate accessory market has been largely ignored. Although there are several major manufacturers of the skates themselves, the accessory market has not been addressed. This provides Pegasus with an extraordinary opportunity for market growth. Skating is a booming sport. Currently, most of the skating is recreational. There are, however, a growing number of skating competitions, including team-oriented competitions such as skate hockey as well as individual competitions such as speed skate racing. Pegasus will work to grow these markets and develop the skate transportation market, a more utilitarian use of skating. Several of Pegasus’ currently developed products have patents pending, and local market research indicates that there is great demand for these products. Pegasus will achieve fast, significant market penetration through a solid business model, long-range planning, and a strong management team that is able to execute this exciting opportunity. The three principals on the management team have over 30 years of combined personal and industry experience. This extensive experience provides Pegasus with the empirical information as well as the passion to provide the skating market with much-needed aftermarket products. Pegasus will sell its products initially through its Web site. This “Dell” direct-to-the-consumer approach will allow Pegasus to achieve higher margins and maintain a close relationship with the customers, which is essential for producing products that have a true market demand. By the end of the year, Pegasus will have also developed relationships with different skate shops and will begin to sell some of its products through retailers.
2.0 Situation Analysis
Pegasus is entering its first year of operation. Its products have been well received, and marketing will be key to the development of brand and product awareness as well as the growth of the customer base.mPegasus International offers several different aftermarket skating accessories, serving the growing inline skating industry.
2.1 Market Summary
Pegasus possesses good information about the market and knows a great deal about the common attributes of the most prized customer. This information will be leveraged to better understand who is served, what their specific needs are, and how Pegasus can better communicate with them.
Target Markets
■ Recreational
■ Fitness
■ Speed
■ Hockey
■ Extreme
2.1.1 Market Demographics
The profile for the typical Pegasus customer consists of the following geographic, demographic, and behavior factors:
Geographics
■ Pegasus has no set geographic target area. By leveraging the expansive reach of the Internet and multiple delivery services, Pegasus can serve both domestic and international customersskaters are using, Pegasus is the only brand that is truly designed for and by skaters. The few competitors’ sails on the market are not designed for skating, but for windsurfing or for skateboards. In the case of foils, storage and carrying are not practical. There are different indirect competitors who are manufacturers of the actual skates. After many years in the market, these companies have yet to become direct competitors by manufacturing accessories for the skates that they make.
2.4 Product Offering
Pegasus Sports International now offers several products: The first product that has been developed is BladeBoots, a cover for the wheels and frame of inline skates, which allows skaters to enter places that normally would not allow them in with skates on. BladeBoots come with a small pouch and belt that converts to a well-designed skate carrier. The second product is SkateSails. These sails are specifically designed for use while skating. Feedback that Pegasus has received from skaters indicates skatesailing could become a very popular sport. Trademarking this product is currently in progress. The third product, SkateAid, will be in production by the end of the year. Other ideas for products are under development, but will not be disclosed until Pegasus can protect them through pending patent applications.
2.5 Keys to Success
The keys to success are designing and producing products that meet market demand. In addition, Pegasus must ensure total customer satisfaction. If these keys to success are achieved, it will become a profitable, sustainable company
2.6 Critical Issues
As a start-up business, Pegasus is still in the early stages. The critical issues are for Pegasus to:
■ Establish itself as the premier skating accessory company.
■ Pursue controlled growth that dictates that payroll expenses will never exceed the revenue base. This will help protect against recessions.
■ constantly monitor customer satisfaction, ensuring that the growth strategy will never compromise service and satisfaction levels.
3.0 Marketing Strategy
The key to the marketing strategy is focusing on the speed, health and fitness, and recreational skaters. Pegasus can cover about 80% of the skating market because it produces products geared toward each segment. Pegasus is able to address all of the different segments within the market because, although each segment is distinct in terms of its users and equipment, its products areuseful to all of the different segments.
3.1 Mission
Pegasus Sports International’s mission is to provide the customer with the finest skating accessories available. “We exist to attract and maintain customers. With a strict adherence to this maxim, success will be ensured. Our services and products will exceed the expectations of the customers.”
3.2 Marketing Objectives
■ Maintain positive, strong growth each quarter (notwithstanding seasonal sales patterns).
■ Achieve a steady increase in market penetration.
■ Decrease customer acquisition costs by 1.5% per quarter.
3.3 Financial Objectives
■ Increase the profit margin by 1% per quarter through efficiency
and economy-of-scale gains.
■ Maintain a significant research and development budget
(as a percentage relative to sales) to spur future product
developments.
■ Achieve a double- to triple-digit growth rate for the first
three years.
3.4 Target Markets
With a world skating market of over 31 million that is steadily
growing (statistics released by the Sporting Goods Manufacturers
Association), the niche has been created. Pegasus’ aim is to
expand this market by promoting SkateSailing, a new sport that is
popular in both Santa Monica and Venice Beach in California. The
Sporting Goods Manufacturers Association survey indicates that
skating now has more participation than football, softball, skiing,
and snowboarding combined. The breakdown of participation
in skating is as follows: 1+% speed (growing), 8% hockey (declining),
7% extreme/aggressive (declining), 22% fitness (nearly
7 million—the fastest growing), and 61% recreational (first-timers).
Pegasus’ products are targeting the fitness and recreational
groups, because they are the fastest growing. These groups are
gearing themselves toward health and fitness, and combined,
they can easily grow to 85% (or 26 million) of the market in the
next five years.
3.5 Positioning
Pegasus will position itself as the premier aftermarket skating
accessory company. This positioning will be achieved by leveraging
Pegasus’ competitive edge: industry experience and passion.
Pegasus is a skating company formed by skaters for skaters. Its
management is able to use its vast experience and personal passion
for the sport to develop innovative, useful accessories for a
broad range of skaters.
3.6 Strategies
The single objective is to position Pegasus as the premier skating
accessory manufacturer, serving the domestic market as well as the
international market. The marketing strategy will seek to first create
customer awareness concerning the offered products and services
and then develop the customer base. The message that Pegasus
will seek to communicate is that it offers the best-designed, most
useful skating accessories. This message will be communicated
through a variety of methods. The first will be the Pegasus Web site,
which will provide a rich source of product information and offer consumers
the opportunity to purchase. A lot of time and money will be
invested in the site to provide the customer with the perception of
total professionalism and utility for Pegasus’ products and services.
The second marketing method will be advertisements placed
in numerous industry magazines. The skating industry is supported
by several different glossy magazines designed to promote
the industry as a whole. In addition, a number of smaller periodicals
serve the smaller market segments within the skating
industry. The last method of communication is the use of printed
sales literature. The two previously mentioned marketing methods
will create demand for the sales literature, which will be sent out to
customers. The cost of the sales literature will be fairly minimal,
because it will use the already-compiled information from the
Web site.
3.7 Marketing Program
Pegasus’ marketing program is comprised of the following
approaches to pricing, distribution, advertising and promotion,
and customer service.
• Pricing. This will be based on a per-product retail price.
• Distribution. Initially, Pegasus will use a direct-to-consumer
distribution model. Over time, it will use retailers as well.
• Advertising and promotion. Several different methods
will be used for the advertising effort.
• Customer service. Pegasus will strive to achieve benchmarked
levels of customer care.
3.8 Marketing Research
Pegasus is blessed with the good fortune of being located in the
center of the skating world: Venice, California. It will be able to
leverage this opportune location by working with many of the different
skaters that live in the area. Pegasus was able to test all of
its products not only with its principals, who are accomplished
skaters, but also with the many other dedicated and “newbie”
users located in Venice. The extensive product testing by a wide
variety of users provided Pegasus with valuable product feedback
and has led to several design improvements.
Fraud examination
ISBN: 978-0538470841
4th edition
Authors: Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark zimbelma