Cima Mountaineering

1. Cima Mountaineering Anna Lucas Caitrin Dolan Ashley Taylor Korey Benton Liz Williams Krista McMahon

2. Outline • Background • SWOT analysis • Current situation • Key issues • Recommendations • Alternatives

3. Background • Hoback Boot Company, founded in Jackson, Wyoming • Began as a Western-style boot company • Inherited from parents (president- Margret & VP- Anthony) • Company was refocused to increase revenues • 1981 Hoback was renamed to Cima Mountaineering

4. SWOT STRENGTHS • Test hiking boots on trails • Discuss marketing strategies to increase profits and increase sales • Sales & Profits have grown steadily • Anthony & Margaret (owners) grew up learning the boot business • Quality emphasized throughout product line • Each line has different styles & features to cover many of the important uses in the market

5. SWOT WEAKNESSES • Growth has slowed down as a result from foreign competition & a changing market • Market wants more casual, stylish boot for weekend hikers • Not much modification to the current boots • Decided not to use mail order catalog companies

6. SWOT OPPORTUNITIES • Market wants more casual, stylish hiking boot for a variety of uses • Ideas to extend the line & expand distribution • Make boots at lower prices • Light weight hiking boot for less experienced hikers

7. SWOT THREATS • Risk in new line of boots • New boots = new set of marketing, competitive issues, and financing a new line • Asolo, Hi-Tec, Salomon, Raichle, Reebok, Nike, Vasque, and Merrell • Rocky Mountain Sports & Great Western Outfitters dropped Cima and picked up their competitors (more to come?!)

8. Current Situation • Revenues are increasing but at a slowing rate • Cima is looking to expand but they can’t decide which alternative to choose • Losing business due to high prices • Competitors are becoming increasingly popular with a less expensive weekender style of boot • Cima currently only focuses on more expensive boots for a medium to advanced level of hiker and climber • Cima only sells using personal selling to specialty retailers while their competitors sell through mail order companies and chain sporting goods stores

9. Problems • Distribution • Price • Competitors • Foreign • Domestic • Promotion • Slow to moderate market growth

10. Problems • Distribution • Currently, Cima boots are only distributed in Western Canada and the Western United States • Only sell in 10 states in the US • Cima Mountaineering only sells their boots to retailers that specialize in mountaineering, backpacking, and hiking equipment • Do not use catalogs • Do not use sporting goods chains • Do not use internet

11. Problems • Competitors • Foreign • Foreign companies exporting their boots aggressively into the United States • Asolo, Hi-Tec, Salomon, Raichle marketed on performance and reputation, usually to the mountaineering serious hiker and weekender segments of the market • Domestic • Vasque and Merrell market boots that compete with Cima, but are offering products for segments of the market where prospects for growth are better • Reebok and Nike new entry to boot market-- appearance and durability of hiking boot with the lightness and fit of athletic shoes-- expanding into markets that demand lower levels of performance

12. Problems • Price • Current prices are too high to reach some of the market • Losing retailers due to high prices • Great Western Outfitters replaced Cima with Merrell due to customers asking for lower-priced boots

13. Problems • Promotion • Cima needs to expand their promotion techniques • Personal selling • Print advertising • Trade shows • Point of sale displays • Only have 10 sales reps • All independent and sell complementary equipment • Print advertising is only placed in backpacking magazines • Summit, Outside, Backpacker

14. Problems • Slow to moderate market growth • Mountaineers only make up 5% of the market share and are seen as having slow growth • Serious hikers make up 17% of the market share and are seen as having moderate growth • They are in no high growth markets and only reach 22% of the boot market

15. Key Issue • How to expand the company in order to increase growth and keep up with competitors • Management is torn on which expansion approach to take • Expand existing Line • Develop new line

16. Recommendations • Introduce a less expensive, more versatile “Cima Weekender” boot • Lightweight, comfortable, durable, versatile • Young to middle aged men and women • Recreational hikers, enjoy outdoors and spending time with friends and family • Price range ($80-$100) • Benefits • Appeal to a new target market • High potential for growth • Low prices while maintaining quality • Expand distribution

17. Recommendations • Increase product distribution of all lines • Expand throughout the U.S. • Expand to chain sporting goods stores • Dicks Sporting Goods • REI • Gander Mountain • Distribute through mail order catalogs • Distribute through internet • Allows customers to order on company website • Allow customers to order through retailer websites

18. Recommendations • Increase Promotion • Advertise on internet • Create website • Have list of retailers that sell Cima products • Hiking Websites • Trail Websites • Retailer Websites • Expand to family-oriented & health magazines

19. Alternatives • We Chose not to expand existing boot lines • Smaller target market • Mountaineering and serious hikers only make up 22% of the boot market • Weekender boot market makes up 25% of the boot market • Less growth potential • Mountaineering is a low growth market • Serious hiker is a moderate growth market • Weekender is a high growth market • Already have multiples styles in those brands • Have three mountaineering styles • Have 5 serious hiker styles • If weekender brand proves successful, they can always expand their existing boot lines in the future

20. Questions?