SYNOPSIS
Cima Mountaineering is a strategic marketing case on selecting a marketing strategy for expansion in the recreation footwear market.
Students will have the opportunity to evaluate a strategy for expanding the sales of a product they are quite familiar with—hiking
boots. Additionally, the case is designed to allow the instructor to use student teams to conduct marketing research, make a
presentation, and apply the concepts of financial analysis, product design and advertising, sales forecasting, discounting to present
value, and payback to evaluate a marketing proposal. The Internet can also be used to gather some of the information.
The case is nicely suited to a course project near the end of a marketing management course. The issue centers on the evaluation of
two marketing opportunities competing for the resources of the firm. The instructor can form project teams of 3 to 5 students and
assign each team to research and evaluate one of the two marketing proposals (see case Exhibits 1, 2 and 3). Following the research,
student teams prepare a written report on the assigned proposal and present it to the class. Following the presentations, class
discussion centers around selecting the most reasonable alternative for the company.
DECISION SITUATION
Cima Mountaineering, Inc. (Cima) is at a crossroads in 1996. After several years of success, Cima’s management faces the challenge
of increasing foreign competition and slowing growth in its primary product lines; addressing these threats is necessary in order to
realize continued revenue and income growth. However, it is at odds on the best strategy to employ in order to combat the threats and
refocus the Company.
There are several issues that Cima must address:
 Identify which (if any) new products are essential to the company’s growth
 Identify which market segments the company should target
 Development of an effective approach to the distribution of its products
In short, Cima needs to design an appropriate marketing strategy that specifies its targeting, positioning, and new product strategies
and then create the marketing mix to implement the strategy.
Cima’s situation analysis will be critical in guiding these decisions. Specifically, the market segmentation analysis and competitor
evaluation will strongly influence the marketing strategy design. A brief synopsis of the results of these steps will be helpful in
evaluating the alternatives.
The following product market graph shows how the market is segmented:
Outdoor
Equipment
Outdoor
Footwear
Hiking Boots
Mountaineering
Serious Hikers
Children
Raichle
Merrell
Asolo
Hi-Tec
Cima
Cima
Tecnica
Fashion seekers
Weekenders
Vasque
Practical Users
Market Segmentation Analysis
Mountaineers
Attributes
durability
support
warmth
traction
Demographic
s
young, mostly
male
shops in
specialty
stores,
catalogs
Serious
Hikers
durability
stability
traction
comfort
protection
young to
middle aged
men/ women
shop in
specialty
stores,
outdoor
catalogs
Lifestyle
adventuresome
independent
risk taker
nature lover
sportsman
backpacker
Competitors
Asolo
Raichle
Salomon
Raichle
Vasque
Tecnica
Hi-Tec
Market Share
5%, slow
growth
$210-$450
17%, moderate
growth
$120-$215
Price range
Weekenders
lightweight
comfort
durability
versatility
young to
middle aged
men/ women
shop in shoe
retailers,
sporting
stores good
stores, mail
order
recreational
hiker
enjoys
outdoors
Reebok
Timberland
Merrell
Nike
Vasque
25%, high
growth
$70-$125
Fashion
Seekers
Practical
Users
lightweight
durability
good value
versatility
Children
durability
protection
lightweight
traction
stylish
lightweight
inexpensive
young to
middle aged
men
shop in shoe
retailers,
department
young married
couples
young men
and women
shop in
department
stores,
outdoor
catalogs
shop in show
retailers,
department
stores,
catalogs
practical
sociable
work
recreation
Merrell
Nike
Tecnica
enjoys family,
outdoors
value
conscious
Vasque
Nike
Merrell
trendy
materialistic
price
conscious
Nike,
Reebok
Hi-Tec
20% stable
growth
$40-$80
5%, slow
growth
<$40
28%, peak of
rapid growth
$65-$100
Sales Mix and Net Profits
Unit Sales
Mountaineering (Units)
Hiking (Units)
Mountaineering(Sales)
Hiking (Sales)
Year
Sales
Net Profit
Profit Margin
1990
19.70%
80.30%
27.86%
72.14%
1990
13,034,562
522,606
4.01%
1991
18.80%
81.20%
26.71%
73.29%
1991
14,221,132
602,976
4.24%
1992
18.00%
82.00%
25.68%
74.32%
1992
15,614,803
776,056
4.97%
Sales Mix
1993
17.20%
82.80%
24.64%
75.36%
1994
15.90%
84.10%
22.93%
77.07%
Net Profits
1993
1994
17,281,683
18,738,529
838,162
809,505
4.85%
4.32%
1995
15.00%
85.00%
21.74%
78.26%
1995
20,091,450
857,134
4.27%
ALTERNATIVES
1. Maintain the current product strategy
2. Enter the Weekender segment with 2 new boot designs
3. Continue focus on Mountaineer and Serious Hiker segments, but expand
product line.
4. Expand current product line and enter the Weekender segment (or some
combination thereof).
5. Sell the business
Criteria
The alternatives will be evaluated based on the following criteria:
 Mission implications: How well does the plan fit Cima’s mission statements and strategic
focus?
 Market potential: What is the market size and growth rate?
 Market segments: Are there identifiable and actionable segments? What are the differences in
responsiveness?
 Competitor assessment: How strong is the competition, and do they have any weaknesses?
 Distinctive competencies: Does Cima have any unique capabilities that give it a competitive
advantage?
 Product advantages: In what ways are Cima’s product the best in the market?
 Targeting strategy: Does the alternative target the correct market segments?
 Positioning strategy: Does Cima’s market perception fit the strategy?
 Branding strategy: Does the alternative leverage, protect, or create brand equity?
 Marketing mix: Does this support the positioning strategy and reach the targeted segments?
 Production capabilities: Do these provide any advantages or limitations?
 Organizational changes: Does the current company structure work with the new strategy?
 Financial implications: What are the associated costs and revenues?
Weekender Segment Financial Projections
($000s)
Incremental Sales
Incremental Cash Flow
Additional Costs
Additional Equipment
Net Present Value
Payback period
1997
392.7
56.9
350.0
150.0
1998
561.2
86.8
1999
875.6
143.6
2000
1,525.4
265.9
2001
1,847.3
336.6
26.7
3.8 years
Expanded Product Line Financial Projections
($000s)
Incremental Sales Growth
Incremental Cash Flow
Additional Costs
Additional Equipment
Net Present Value
Payback period
1997
455.3
66.3
400.0
150.0
1998
888.4
98.2
1999
1,196.1
196.9
2000
1,695.5
293.5
2001
2,882.8
368.4
62.4
3.6 years
Financial Projections for Combined Alternatives
($000s)
Incremental Sales Growth
Incremental Cash Flow
Additional Costs
Additional Equipment
Net Present Value
Payback period
1997
848.7
123.3
750.0
300.0
1998
1,194.6
185.0
1999
2,071 7
340.5
2000
3,220.9
557.4
2001
3,880.1
703.1
89.1
3.7 years
WEEKENDER LINE
MOUNTAINEERING
Good Idea
Bad Idea
CIMA Story Board
EXPANDED
Pro’s
Con’s
What is CIMA’s Target Market(s)?
WEEKENDER LINE
MOUNTAINEERING
Good Idea
Bad Idea
What is CIMA’s Target Market(s)?
EXPANDED
Pro’s
Con’s
THE CIMA CUSTOMER
So, who shops for CIMA products?
Expanded Product Line
Augmented Product Line
WEEKENDER LINE
MOUNTAINEERING
Good Idea
Bad Idea
What is CIMA’s Target Market(s)?
EXPANDED
Pro’s
Con’s
THE CIMA CUSTOMER
So, who shops for CIMA products?
Expanded Product Line
Augmented Product Line
MOUNTAINEERING vs HIKING BOOTS