Chapter 1. Case Loexposure Outerware Background LoExposure Outerware, a Colorado-based company, sells two primary product lines to specialty outdoor stores throughout the United States. One product line, called No-Sun, protects consumers from exposure to sunshine, and the other (No-Cold) is functional in cold temperatures. LoExposure has been in business for eight years, and has become a favorite of outdoor enthusiasts who value quality over price. Accordingly, LoExposure is among the higher-priced suppliers in the market. LoExposure promotes it brands through social media with avid followers on Facebook and Instagram. Occasionally the company will use extreme athletes to promote its brands at specific events, but does not believe in hiring celebrity spokespersons on a longer-term basis. LoExposure does no formal advertising or sales promotion, preferring word-of-mouth and social media to spread the word about its product lines. Current Situation Kelly Kinard recently joined LoExposure as a sales representative in Salt Lake City, Utah. Kelly's primary customers are outdoor specialty stores in Salt Lake City, the university towns of Logan and Provo, and in nearby ski areas such as Park City, Deer Valley, and Snowbird. With the No-Cold and No-Sun product lines available, Kelly's potential for year-round sales excellent. Kelly is a recent college graduate with a degree in marketing. He had several part-time jobs as he worked his way through college. He also did an internship with LoExposure during his senior year and was excited to land a full-time sales position upon graduation. During his internship with LoExposure, Kelly became totally sold on the quality of the products. By the time he finished his initial product knowledge and sales training with the company, Kelly was genuinely enthusiastic about representing LoExpoure in his sales territory. After a few months in the field, Kelly was doing well with existing customers and had added several new accounts. After a great week in the field ended with adding a new retail account, Kelly told a friend, "this is a great job. The products are so good, they practically sell themselves!" Despite his success, Kelly had run into an obstacle with UpMountain Gear Shop, a small chain with four stores in his territory. When Kelly first began pursuing Up Mountain, he did some Web-based research on the company. Kelly found that Up Mountain was proud of its sales growth in recent years and that the company attributed a lot its success to providing the highest-quality products at competitive prices. Its customers seemed very pleased according to posts on Up Mountain's Web site and in social media. According to Kelly's research, UpMountain seemed concerned about the environment, taking an especially strong stance against the "throwaway society." Kelly was pleased to learn these things about UpMountain, as his company had similar views. LoExposure also attributed its success to providing the best customer experience possible. In addition, LoExposure made extremely durable products backed by a generous repair warranty that kept its products in use well beyond the typical life span for outdoor clothing. When Kelly first approached Amanda Wilson, the lead clothing buyer for Up Mountain, things went well. Amanda was impressed that Kelly had done his homework on UpMountain and pleased that the two companies shared core values related to the customer experience and environmentally friendly practices. In their first meeting, Kelly had provided Amanda with an overview of his two product lines and tried to determine what would be important to Amanda if she were to further consider adding LoExposure as a supplier. Amanda was open with Kelly and indicated that she was impressed with the products, but not sure they would fit in her stores. Near the end of their first meeting, the following conversation took place: Print Search Annotations Accessibilit Kelly: Amanda, I hope you will agree that our products fit the bill in terms of high-quality at a competitive price. Amanda: I agree on the high-quality piece, but am not sure about the pricing. Our customers want high quality, but they also want really good value. Kelly: I understand completely and we have thousands of customers who tell us that our products are worth the price. And of course you know that a higher retail price means more profits for Up Mountain. Amanda: Well, yes that's obvious if it something we can sustain in the long run. But if we get greedy, we can lose those loyal customers. Kelly: We both know that customers vote with their dollars and we have a great record of pleasing our customers. In my opinion, your customers will see the value and price will not be a major concern. Sure, you have some customers that won't buy our products, but those who are seeking long-term value will gladly pay the price. Amanda: They may be, but I am not convinced just yet. Kelly: I know we are running out of time before your next meeting, so could I summarize where we are for now? Amanda: Sure, go ahead. Kelly: You like our products, but you are not sure the price point fits your customer base. You like the durability of our products and the fact that we don't sell throwaway items. Am I right about those two things? Amanda: No arguments from me. Kelly: I think the only way to answer the price-point issue is for you to give our products a try. I am sure they will sell without any problem let the market decide. Amanda: Well, I am not prepared to make that decision today and I really do need to get to my next meeting. Kelly: Is there anything other than the price-point issue that we need to discuss before you make a decision? Amanda: Well, yes there is. I ask all of our suppliers to give me a plan for how they would help drive consumer traffic to my stores and then, through merchandising and personal selling, help convert that traffic to sales in the store. I have to run now, but I would be willing to meet again if you have some concrete ideas on those topics. Kelly: That works for me. Would 2:00 p.m. next Thursday work for you? . Amanda: Well, I am not prepared to make that decision today and I really do need to get to my next meeting. Kelly: Is there anything other than the price-point issue that we need to discuss before you make a decision? Amanda: Well, yes there is. I ask all of our suppliers to give me a plan for how they would help drive consumer traffic to my stores and then, through merchandising and personal selling, help convert that traffic to sales in the store. I have to run now, but I would be willing to meet again if you have some concrete ideas on those topics. Kelly: That works for me. Would 2:00 p.m. next Thursday work for you? Amanda: I will put it on my calendar, see you then. Kelly left Amanda's office with mixed feelings. It was clear that Amanda did not think LoExposure's products would "sell themselves" as Kelly believed. Further Kelly was concerned that Amanda wanted marketing ideas for driving consumer traffic to the UpMountain stores. LoExposure did not use traditional advertising or sales promotion. Kelly thought, "well I am a salesperson, and I could definitely train UpMountain's salespeople on how to sell the products in the store. Maybe I can come up with something on driving consumer traffic to the stores and merchandising our products in the store." Later that day, Kelly scheduled a meeting with his sales manager, Shannon Morin, to plan his upcoming meeting with Amanda. 2. What recommendations can you make for Kelly's next meeting with Amanda? Role Play