Case Study Analysis: Swisher Mower and Machine Company
Chapter 7
MARKETING PROBLEM DEFINITION
In early 1996, Wayne Swisher, president and chief executive officer (CEO) of Swisher
Mower and Machine Company (SMC) received a certified letter from a major national retail
merchandise chain inquiring about a private brand distribution arrangement for SMC line of
riding mowers. Wayne Swisher had only recently assumed his position as president and CEO
from Max Swisher, his father and company founder. Wayne Swisher was previously vice
president of sales, a position he held for six years following completion of the MBA program
at Southern Methodist University in Dallas, Texas. Prior to graduate school he has worked in
sales and marketing position for three years at a large Fortune 500 corporation. The private
brand distribution proposal was the first major decision that he faced as president and CEO.
He thought the inquiry presented an opportunity worth serious consideration, since unit
volume sales of the SMC riding mower had plateau in recent years. The inquiry received by
SMC concerning a private brand distribution arrangement requested a sample order of 700
standard riding mower units to be delivered in January 1997. The national retail merchandise
chain expected to make an annual order of approximately 8200 units. The chain wanted to
purchase the mowers at a price 5 percent lower than SMC manufacturer’s list price for its
standard model. The chain wanted that the mower be different from SMC Ride King, he
requested different seat and a particular color and type of paint and specified that all parts be
American-made or that the mower have at least display an American name as its producer.
The chain did not propose any mechanical specifications for the mower. Details concerned the
proposal would have to be closely studied because it represented a significant departure from
SMC current distribution practices.
COMPANY OVERVIEW
Swisher Mower and Machine Company was formed in 1945 by Max Swisher. He received his
first patent for a gearbox drive assembly when he was 18-years old, he develop a selfpropelled push mower utilizing this drive assembly. He began selling these mowers to
neighbors after converting his parent’s garage into small manufacturing operation and he
formed Swisher Mower and Machine Company. In 1966, unit volume for SMC riding
mowers peaked at 10.000 units with sales of $2 million. In the 1990s, the unit volume
remained constant with around 4,250 riding mowers per year. Compared with 1,263,000 unit
sales in riding mowers and tractors industry, SMC only occupied around 0.3% market
share. SMC produced limited but differentiated products. SMC’s flagship product, the Ride
King, was credited with the first zero-turning-radius riding mower. SMC also produced a
trail-mower called T-44 with a cutting width of 44 inches. SMC planed to broaden SMC
product line in 1996 by introducing a high-wheel string trimmer product, Trim-Max, a highwheel, walk-behind product.
With manufacturing plant in Warrensburg, Missouri, SMC owned an annual capacity of
10,000 riding mower units on a single 40-hour-per-week shift with distribution mainly in nonmetropolitan areas.
About 75% of sales of SMC were made in non-metropolitan areas. SMC sold 30% through
wholesalers, 25% through direct-to-dealer, 40% as private-label, and the rest 5% as exports. It
sold the Ride King through wholesalers, who located throughout the country, focusing on
farm dealers situated in the south central and southeastern US.
INDUSTRY OVERVIEW
Riding lawn mowers are classified as lawn and garden equipment with two basic
configurations, the front-engine lawn tractors and rear engine riding mowers. However there
are some mid-engine riding mowers on the market, such as those produced by SMC. Frontengine lawn tractors are the most popular design followed by rear-engine and mid-engine
models. Rear engined lawn tractors are perceived as stronger and more durable.
Competition in riding lawn mower market was fierce with ten manufacturers comprising
major competitors in 1995, while SMC only occupied around 0.3%, based on sales units. All
these companies made Riding mowers under a nationally branded name and at the same time
were engaged in private-label production. It was estimated that private-label mowers account
for 65 to 75 percent of total industry sales.
Each riding mower manufacturer priced its products at price points. The representative retail
prices for national and private-label riding mowers typically ranged from $800 to $5,000. The
manufacturer’s price of Ride King of SMC, $ 650, was quite comparative, compared with
industry average.
CONSUMER ANALYSIS

National retail merchandise chains - 24%

OPE/Farm Equipment & supply stores - 22%

Lawn/Garden Stores – 19 %

Discount department stores - 13%

Home centers – 10%

Hardware stores – 2 %

Others – 10%
COMPETITION POSITIONING
Ten manufacturers comprised the major competitors in the riding lawn mower market in
1995: American Yard Products, Ariens, Honda, John Deere, Kubota, MTD Inc, Murray of
Ohio, Snapper, Toro, and Garden Way/Troy-Bilt. Ariens, Honda, John Deere, Kubota, MTD
Inc, Murray of Ohio, Snapper, Toro, and Garden Way/Troy-Bilt sell their products through
lawn and garden stores and specialty retailers. MTD, Murray and American Yard Products
also sell to national mass-merchandise stores. All of these companies manufacture riding
mowers under a nationally branded name and engage in private label production. Several
companies produce a combination of nationally branded riding mowers and private labels for
mass merchandisers (e.g., Sears, Wal-Mart, Kmart), home centers (e.g., Lowes, Home Depot),
and hardware chains (e.g., True Value Hardware).
SWOT ANALYSIS
INTERNAL FACTORS
POSITIVE
NEGATIVE
STRENGTHS
WEAKNESSES

Distinct products

Limited range of products

High quality, simple design, easy to use

Perception on rear and mid engine –not as
and maintain , no significant claim
strong and durable as front engine

Interchangeable parts

One man makes all the decision

Competitive price

Small business mentality

Personal relationship with dealer,

Insufficient attention for promotion and
distributors and end-customers
EXTERNAL FACTORS

One new product on the way (Trim Max)
advertising campaign

No national distribution network
OPPORTUNITIES
THREATS



Limited market coverage (south central,
Many big competitors like Honda, John
southeastern). Potential expansion to
Deere, American Yard Production etc with
the west
stronger financial resources and economic
New target market include consumer
size of capacity
housing, in addition to farms

Cyclical industry

Private labels business may be growing

After next year, industry may be down

Possibility for automation by technology
development in long term (production
streamline, cost reduction)
ALTERNATIVES AVAILABLE

Enter distribution Arrangement with Retail Merchandise Chain: It could be to SMC’s
advantage to enter the arrangement because it would provide them the chance to reach
consumers they currently do not. It could also allow SMC to take advantage of unused
manufacturing capacity, and, however, force them to run overtime. The contract would
only lock SMC in for 2 years, so they would be free after the short trail period. SMC
would also have the opportunity to introduce the T-44 if they took the proposal. On an
opposing side, this alternative would create a large additional liability for SMC because of
the contract terms that state they will assume liability for personal injury that may occur
from use or maintenance on the mowers. The contract would also decrease gross profit
because the arrangement states the mowers will bought at 5 percent less than the current
selling price. There will also be some cannibalization. The only other potential threat the
contract possess would be creating a dependency for SMC on the retail merchandise
chain. If SMC begins producing for this retail chain, then two thirds of their unit sales per
year will be in the hands on the retail chain. This means the retail chain will have a very
large amount of control of the contract negotiations between them.

Continue Current Operations: By continuing current operations as they are, SMC could
avoid the added costs and put the funds toward other expansion possibilities. However, if
SMC rejects this proposal, then they will be missing out on what makes up approximately
70 percent of industry sales. They will also be handing the proposal directly to one of their
competitors, which could very likely mean the loss of market share to a competitor. If the
industry continues with the trend to private-labels, then SMC may miss their only or
greatest opportunity to expand.
SOLUTION
SMC should sign the proposal with the retail merchandise chain. This proposal holds too
many opportunities for SMC to let it pass or fall into the hands of another competitor. The
results of accepting the proposal look far better than the alternative. There would be a gross
profit gained from the proposal. The proposal will allow for more opportunities to expand
with time. Now is the time for SMC to take its share of the private-label segment and increase
its brand presence in the metropolitan areas. Plus, as retail merchandise chains grow in
popularity with consumers, SMC will have its product there for the increasing number of
buyers.