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SALES MANAGEMENT.
Term Paper ID:23627
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Essay Subject:
Examines role & tools of hypothetical manufacturing firm's sales manager. Product, performance, territories, quotas, training.... More...
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8 Pages / 1800 Words
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Paper Abstract:
Examines role & tools of hypothetical manufacturing firm's sales manager. Product, performance, territories, quotas, training.
Paper Introduction:
Introduction
The athletic shoe market is no longer the strict province of the professional athlete. Weekend athletes and those who do not participate in any sports wear athletic shoes. Nor have the athletic shoes remained all-purpose: there are shoes for walking, running (on grass and hard surfaces), bicycling, tennis and so on. The variety of shoes available and the fact that athletic shoes are now considered acceptable leisure attire means that the industry has grown tremendously during the 1980s and early 1990s. The industry as a whole had sales in excess of $10.1 billion in 1994, with 1995 sales expected to approach $11.5 billion (Rindos, 1995, p. 1668). This research considers the recent performance of one American shoe manufacturer, Converse, and evaluates the strategic marketing concepts it should evaluate.
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Converse has recognized that athletic shoes are often purchased byconsumers who have no intention of wearing the shoes in athleticcompetition. Weekend athletes and those who do not participate inany sports wear athletic shoes. However, such strategies require that thecompany first consider the various types of consumer behavior, and examinehow those behaviors affect the company and its products. Converse has responded to these needs and is likely to gain market shareby continuing to compete in this area. F-5). Consumer Perception Consumers have the perception that Converse only produces athleticshoes, although it participates in other market segments. The biggest strength that Converse has going for it today is itsname. 36). FootwearNews, pp. Consumer Personality The company's primary opportunities come from focusing on a narrowrange of products rather than trying to compete against each of the shoesthat Nike or Reebok introduces. The company was foundedin 19 8 and was owned by the family until 1971, when it was acquired by aconglomerate (Eltra Corporation). Since the bulk of athletic shoesare worn by non-athletes, or at least are worn for non-athletic events aswell as sporting events, this represents a significant market. Primary reference groups are those groups in which each of usparticipates on a regular basis, such as our family and friends. Reference Groups The consumer also looks at who is, and who is not, purchasing theproduct, and at the feedback the consumer receives when the product isdiscussed. 5). Giventhat many of the athletic shoes purchased today are not used for athleticpurposes, it is in the interest of Converse to change the perception ofconsumers that it only produces athletic shoes. Nor have the athletic shoes remained all-purpose: there are shoes for walking, running (on grass and hardsurfaces), bicycling, tennis and so on. This research considers the recent performance of one American shoemanufacturer, Converse, and evaluates the strategic marketing concepts itshould evaluate. (1996, September 23). By molding consumer attitudes and building on the personality ofwould-be athletes, Converse may discover a very lucrative additional marketfor its shoes. These consumers want to be perceived asstylish and fashionable, and even athletic, but do not want to necessarilyparticipate in the activities for which Converse shoes were originallydesigned. Controlling the learning process is difficult for a company since itcannot control which products are deemed in-style by a particular group ofpeople, or which products are favored in the media or entertainment worlds(which often shape personal tastes and are important factors in thelearning activity). The companycontinues to have a strong presence in the NBA and is also popular withcollegiate athletes. It is highly unusual for a company to recall ashoe, and Converse's action could be used to demonstrate that it iscommitted to quality; however, the company must still demonstrate to themarket that the problems which led to the quality defect in the first placehave been remedied, and that the company produces a quality product acrossits product lines. 13). Emerman, S. Washington, DC: Converse, Inc. The children's shoes aregenerally "takedowns," which are merely smaller versions of adult varietyshoes. At a time when the company is trying to refocus its efforts on itscore business of athletic and athletic/leisure footwear, the recall couldprove a serious setback. R., et al. History Converse had a stable history for most of its 9 years of operation;however, the last two decades have been filled with internal change andchanges in ownership and management, just as the industry itself hasundergone significant change during the same time. Tedeschi, M. Introduction The athletic shoe market is no longer the strict province of theprofessional athlete. Of course, the company runs the risk that it willonly confuse the consumer more and lose its core market of athletic shoecustomers. Secondaryreference groups are groups with which we have occasional interaction, suchas professional organizations. The company was built on the strength of the Chuck Taylor and AllStar shoes, which were used for decades in the National BasketballAssociation (NBA) with the well-known "high-top" look. Press releases and favorable reviews in the press are likelyto bolster the purchase decision, and the popularity of the shoes withfavorite sports figures will also help the learning process. The lack of a strategic vision continues, however, and plagued thecompany as recently as 1995. To some degree, Converse has recognizedthis as it has eliminated some of the specialized shoes from its offeringand is now focusing on the athletic and athletic/leisure market with anemphasis on the basketball shoe and a more select group of products than inthe past. To be and not to be.Journal of Advertising, pp. As a result,the company lost market share to newer organizations, such as Nike andReebok, and now must struggle to maintain its market share in thisenvironment (Emerman, et al, 1996, p. Because of this, the company should carefully develop brands whichseparate the athletic from the non-athletic shoe, and which permit thecompany to target specific consumers in terms of their perceptions as wellas their market niche. However, it is the aspirational reference group which has a particularimportance to Converse. In May, Converse acquired Apex One, adesigner of sport apparel and accessories. This is a reference group to which a particularindividual aspires to; in the case of Converse, this would include athletesas an aspiration reference group, and Converse would be making its appealto the members of the consuming public who aspire to be perceived of asathletes, or who emulate athletic behavior (Englis & Solomon, 1995, p. 15). Thus Converse is selling more than a shoe when it appeals tothese personalities: it is selling an image and a lifestyle.Understanding that the shoes can be in high demand by those who will neveruse them in the way they were originally intended means that Converse isable to use the personality of its consumer to its advantage. It may be that promotional activitiesare not directed at these groups, but instead, an indirect approach may beused so that consumers across a wide range of groups are familiar with theproducts and have a favorable reaction to them. Since the managementupheavals that began in the early 197 s, that strategy has been diffused asthe company struggled to adapt to the changes occurring in the athleticfootwear industry as a whole. Conclusion Any company can benefit from understanding how consumer behavioraffects their products, and any company can develop strategies to takeadvantage of consumer behavior. If theexperience is negative, the learning results in a negative reaction by theconsumer, who is less likely to purchase the goods in question again, or torecommend them to others (Englis & Solomon, 1995, p. In 1979, Eltra was itself acquired byAllied-Signal (which is a high technology company), which sold the shoecompany back to management in a leveraged deal. Converse is still a favorite of professional basketball players(although none of the 1996 Olympic team members wore Converse) and it isable to use those players who prefer converse in its promotionaladvertising. (1995, August 25). In 1994,INTERCO (which also owned Broyhill Furniture and Florsheim Shoes) divestedConverse through a series of complex transactions and the company is nowfully independent once again ("1 -K Filing," 1995, p. Secondary reference groups which might beof particular importance to Converse include amateur athletic teams sincethe purchase or wearing of Converse shoes could result in high praise fromothers in the secondary reference group. Shoe industry. (1995, August 14). Fundamentally, it failed to successfully segment its market. By carefullysegmenting the market and shaping consumer perceptions, Converse can carveseveral market niches for itself which depart from its traditional coreniche of merely producing athletic shoes. When Converse targets this market segment, it does so based on thepersonality of the consumer. Although analysts wereskeptical as to the wisdom of this business venture, Converse went aheadwith the transaction. 1668. 2-3. These reference groups can have a direct effect on the purchasedecision, and Converse can help direct this effect by using some of thesereference groups as target markets. (1995, Spring). 4). Management took thecompany public in 1983 and in 1986, INTERCO acquired Converse. From this standpoint, the company maintains a strongmarket segmentation orientation, with the emphasis on the athletic segmentsand on those consumers who want to be perceived as athletes. Lefton, T. Rindos, M. J. Thus consumerswho are interested in casual shoes or in shoes for nonathletic purposes maynot consider Converse shoes because they assume that these are forprofessional, or at least serious, athletes (Lefton, 1996, p. However, the company can take proactive steps topromote its products with images that are positive, and to cultivate animage for the product which is likely to reinforce the learning process ofthe consumer. (1995). The variety of shoes available andthe fact that athletic shoes are now considered acceptable leisure attiremeans that the industry has grown tremendously during the 198 s and early199 s. Converse closing Apex One. 13-28. Englis, B. Companies which manufactured shoes were nowmanufacturing clothing and apparel, and shoes themselves began to becomemore complicated as research and development efforts led to specializedshoes for walking, running, aerobics, cross-training and other activities.Converse was left struggling in a conglomerate which did not understand itsbusiness. Where Converse should have had a naturaladvantage in this field because of its long history, it suffered from alack of vision which top management was unable to provide. This recall has a long-term effect on the company in that consumerswho may not have otherwise been familiar with the company or its productvery possibly heard about the recall. References 1 -K SEC Filing. Value LineInvestment Survey, p. This change in perception can come about through advertising andmarketing and using tactics such as having non-sports figures appear in itspromotional activities. Learning Converse can also benefit from understanding how consumers learn abouttheir purchases. 36-39. (1996, March 2 ). For these consumers, there is animmediate negative attitude toward the company and its products which willbe difficult to overcome without strong marketing and promotional effortconcentrated in this area. Dean WitterReynolds Company Reports. The athletic shoe industry was itselfundergoing significant change during these years, as consumers moved fromwearing athletic shoes just for athletic events and began making theseshoes part of their casual wear. Consumer Attitudes In mid-1995, Converse recalled a number of its shoes due to a qualitydefect. 1). The industry as a whole had sales in excess of $1 .1 billion in1994, with 1995 sales expected to approach $11.5 billion (Rindos, 1995, p.1668). During most of its history, Converse had a simple and highlysuccessful strategy: produce basketball shoes. Market Segmentation Converse competes in several product areas, including athletic/leisure(athleisure), athletic, and children's shoes. This cost the companyvaluable resources, but also indicated to consumers that Converse was stilllacking a strong strategic direction (Tedeschi, 1995, p. G., & Solomon, M. In fact, the company may well beable to realize additional sales without redesigning its shoe at all, butby using different promotional strategies in order to attract thoseconsumers who are not active athletes, but who aspire to be consideredathletic. Instead, these consumers are interested in fashion and style. Converse, Inc. The companyalso was unable to reduce its cost of goods sold, despite the lowerrevenues, which contributed to the overall loss for the year ("1 -KFiling," 1995, p. The lack of a single strategic focus during the 197 s and 198 sundoubtedly hurt Converse. This cost the company an estimated $15 million in revenue in theshort-term, but is likely to weaken the company's long-term presencebecause of the adverse publicity associated with the recall (Emerman, 1996,p. 2). Most consumers seek reinforcement after they make apurchase; this reinforcement can come from their peer group, from theirsocial interactions, and from external sources such as magazine articles.It is important that the learning that takes place as a result of theseinteractions be positive and reinforce the purchase decision. At the end of the year, revenues fell sevenpercent from 1994, and were up only seven percent from 1983. By August, the company had decided that this was anill-advised move and Apex as closed in September. Empty nests, full pockets.Brandweek, pp.
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