Date: 3 November 2013
SIMULATION TITLE:Retailing/Wholesaling
SIMULATION DESCRIPTION: HentonCast, a small privately-held maker of highend fly-fishing rods, is known for expensive, hand-made custom rods used by
enthusiasts and celebrities. They are about to introduce a line of readymade rods
with a somewhat lower, yet still premium price that will be accessible to a wider
range of sports enthusiasts. The Vice President of Marketing must make
appropriate channel design decisions to continuing serving HentonCast's current
market and to serve their new market.
You earned 100 percent.
Background
HentonCast, a small privately-held maker of high-end fly-fishing rods, is known for
expensive, hand-made custom rods used by enthusiasts and celebrities. They are
about to introduce a line of readymade rods with a somewhat lower, yet still
premium price that will be accessible to a wider range of sports enthusiasts.
You are the Vice President of Marketing at HentonCast. Your job is to determine
an appropriate target market for these new fishing rods and establish appropriate
marketing channels to reach those customers, while still providing service to your
original customers.
Background
HentonCast currently sells only custom-made fishing rods. These rods are among
the best in the world. The rods must be custom-fitted and tuned, and each sale
includes an in-person training session to help the proud owner get the most out of
their HentonCast rod. As a consequence, HentonCast rods are sold only at the
factory story in Helena, Montana, plus at the five company retail stores in New
York, Los Angeles, Tokyo, Aspen, and Jackson Hole.
An example of this type of customer is Gail, star of "Fishing with Gail," a popular
cable show. She has visited the HentonCast factory store and worked with staff to
design her ideal fishing rod.
Background
However, there is a limited market for such high-end, exclusive rods, and
HentonCast has conquered this market. The company sees growth possibilities in
taking the HentonCast brand slightly down market, where it will provide a
readymade, though still superior, fishing rod. These rods will require sophisticated
tuning adjustments to perform their best for the particular size and strength of each
angler. Since the rods are so sophisticated, these adjustments must be done in
person by a HentonCast expert, using the patented HentonCast measuring
machine, the HentonCastr, or the rod will not perform well for its owner.
Selecting a Target Market
Your first task is to decide the best target market for HentonCast's new line of
readymade, but still top-quality, fishing rods. Choose the best market for this new
product from the choices at right.
YOU CHOSE OPTION 2
Expand the target market to serious anglers
Analyzing Consumer Needs
Now that you have selected a target market, you must analyze consumers' needs
before you decide how best to reach them. You can choose to hold a focus group
to gather information from potential customers.
YOU CHOSE OPTION 1
Hold a focus group.
Focus Group: Results
You hold a focus group to find out what is important to your potential customers.
Participants include Denzel, a wealthy fishing enthusiast; Sam B, an owner of a
Wyoming resort; and Alexandra, president of a women's angling club. Points all
agree on are:
They are willing to pay a high price for a HentonCast rod, but expect superior
customer service in return.
They expect a high-quality store atmosphere with expert staff.
They want custom rod tuning and use tips, as well as an excellent warranty.
Setting the Level of Customer Service
You must also determine what level of customer service will be appropriate for
customers of the ready-made fishing rods.
YOU CHOSE OPTION 3
Extensive service such as an expert staff, even if it causes prices to increase.
Channel Alternatives
Your next step will be to identify the major retailing and wholesaling channels that
HentonCast might use, and then evaluate them in terms of consumer needs and
HentonCast's priorities. Members of the company have submitted suggestions to
you for possible channels. Examine the arguments for each alternative, and select
three for your team to evaluate.
Analyzing Intermediaries: Economic Goals
You call a meeting to evaluate the three alternatives. First, you look at the choices
in terms of HentonCast's economic goals of maximizing revenue and profit.
Everyone on your team has a different opinion, but you must make the final choice.
Which argument is most compelling?
YOU CHOSE OPTION 1
If we sell through high-end specialty shops, we would have to invest, but in return
we could charge high prices and give consumers a quality experience and product.
This could change them into "true believers" of the HentonCast brand.
Analyzing Intermediaries: Control Goals
You move on to evaluate the choices in terms of HentonCast's control goal of
managing the customer experience. Everyone on your team has a different
opinion, but you must make the final choice.
YOU CHOSE OPTION 1
If we sell through high-end specialty shops, we would be able to work with the
shops to train staff and present our rods. The wider market these shops afford is
worth some loss of control.
Analyzing Intermediaries: Adaptive Criteria
You move on to evaluate the choices in terms of HentonCast's goal of adapting to
changes in the market. Everyone on your team has a different opinion, but you
must make the final choice.
YOU CHOSE OPTION 1
If we sell through high-end specialty shops, we would have to make some longterm commitments. However, it would be worth it to provide what our customers
want.
Choosing Intermediaries
Now that you have analyzed your possible channels, it is time to pick how you think
HentonCast should sell its readymade rods.
YOU CHOSE OPTION 1
High-end specialty shops
Channel Conflict
You begin your sales of the readymade rods. Unfortunately, HentonCast's existing
stores are angry that they are not allowed to sell the rods. What is your best
response?
YOU CHOSE OPTION 3
Hold a meeting with the HentonCast store directors, explaining your decision.
Original Product
You have made your decisions about the sale of HentonCast's readymade fishing
rods, but what about your original product, the custom rods?
YOU CHOSE OPTION 1
Maintain the current ways of selling the custom rods
Feedback
You earned 100 percent.
To improve your skills while improving your score, read your textbook and review
your course materials before attempting this simulation again.