Adv 388k group 6 case analysis ccm hockey

CCM Hockey: The Re-Launch of the U+ Pro Skate ADV 388K Integrated Communication Management Group 6

Zachary Bodner (bodnerzd) Alex Hart (amh6375) Xing Liu (xl5525) Darya Procopovich (dp28353) Emma Szyller (es34345) The University of Texas at Austin

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Situation Analysis Demographic Environment While Hockey is popular in a number of countries, the market is concentrated in Canada, the U.S. and Europe; the major European countries are the Czech Republic, Finland, Russia, and Sweden. Buyers’ criteria when purchasing skates include brand, durability, fit and comfort, weight and price. Depending on the market segment, the look of the skate is also important.

Many hockey players belong to households in the mid-to-high income brackets. More than half of all hockey players in Canada live in households with incomes more than C $75,000 annually.

The manufacturers of hockey equipment consider winning the loyalty of the 12 to 18 years age group critical to their success. This target segment has been labeled ‘The Boss,’ and has a major impact on sales because many of these players are growing and therefore regularly need new equipment. In fact, some go through two pairs of skates in a single season. The Boss, for whom hockey is a passion, enjoy the physical nature of the game and aspire to be “a player with finesse, showing good moves, speed, and agility.” The Boss sees skates as the most important piece of hockey equipment.

Table 1. Consumer segments Personal Expression and Performance Group

Smart Performers

Price Conscious Performers

Share of consumers

49%

45%

6%

Share of market US$

59% = $365.8 Mil

37% = $229.4 Mil

4% = $24.8 Mil

Level of play

Recreational/Elite

Recreational/Elite

Recreational

Age

18-20 years

12-17 years

18-20 years

Regional Prioritization

CAN(1), US(2), RUS(3), CZE(4)

CAN(1), US(2)

CAN(1), US(2), SWE(3), FIN(4)

Main concerns

Image, product and personal performance, brand reputation and brand popularity. They want a brand that reflects their style and personality.

Price is not a barrier.

Rational decision makers who consider both value and product performance criteria when making a purchase.

Price is paramount.

Subsidiary concerns

Respond well to endorsements from players in the NHL; Seek recommendations from coaches, online forums and sales staff before purchasing; Emotionally driven and

Want equipment that will help them outperform the competition while staying within a budget; they value superior product design and performance; don’t care much about NHL endorsements or the

Also want durability and value; they favor brands that are priced within the limited budgets.

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looking for leading edge technology.

need for personal expression.

While these three segments exist, their needs and behaviors are not very distinct. Thus, there is some overlap. For instance, both recreational and performance players could be found in the first two segments. The three segments also overlap with ‘the Boss’ consumer category.

Economic Environment The hockey equipment industry has experienced relatively flat sales over the past few years, and there has been a number of mergers and acquisitions among companies in the industry. In 2006, the global hockey equipment industry was worth US $603 million and in 2007 it was worth US $642 million. In 2008, however, sales were down to US $620 million. It is estimated that in 2009 sales will be relatively stable at US $615 million. According to the brand managers, a family could sometimes spend as much as US $15,000 to US $20,000 annually for a player in Bantam or Midget (AA or AAA) in the U.S. However, in Canada, soccer has overtaken hockey as the most popular game among younger demographic groups mainly due to cost. Relative to soccer, hockey is an expensive game to play.

Natural Environment There are relatively few skating rinks, so the cost of ice time is expensive and a significant amount of travelling is required because of the distance.

Technological Environment The technology of hockey skates and sticks is among the most visible emblems of the sport and their technology often gives users an additional edge on the ice. Consequently, manufacturers devote a considerable portion of their R&D budget to skate development, looking for the next breakthrough in technology. Apart from weight, most of the quality features are hidden from the buyer, except for the runner, the metallic blade of the skate that comes into contact with the ice. Blades are made from either stainless or carbon steel. Carbon is considered the cheaper blade but it delivers a much better edge that provides better and faster skating; however, it does not last as long as the alternative.

CCM’s U+ Pro skate is the only true custom-fit skate on the market. It also features the Rocket Runner, a new blade technology. Both of these new technologies result in the lightest skate on the market, as well as the most thermo-formable. U+Pro skate is a one piece construction that, when heated, takes the unique shape of each individual foot. There are no sandwich layers, like traditional constructions, or pre-set shapes like competitors. This skate is the only true custom-fit skate on the market. It also features a new blade technology. The new U+Pro Reloaded - features an extra, more durable Sulyn outer layer, a new pro-approved felt tongue, added padding in the ankle area and a tighter heel lock. In making this skate, CCM

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addressed all the product difficulties experienced in 2008, but did not change the overall ‘look’ of the skate.

Competitive Environment In the past few years, many smaller equipment manufacturers have failed or have been bought out by larger competitors. As a result, the hockey skate market is now made up of the following key competitors: Reebok-CCM Hockey, Bauer Hockey, Easton, and Graf.

The global hockey equipment market is extremely competitive. Manufacturers compete on innovation quality, brand and the use of endorsers who are often well known hockey players from various teams and leagues (pg. 6). Hockey equipment companies are constantly looking for ways to out-maneuver and steal market share from competitors.

Table 2. Competitor comparison Reebok

Bauer

Easton

Graf

Market share

20%

39%

19%

3%

Differentiator

Has a real presence in head-to-toe and goalie; leader in goalie equipment

Leading brand and oldest competitor; high quality goalie and head-to-toe equipment; brand of choice among all segments of the market

Established name in sticks and gloves and growing force in skates; does not participate in the goalie sector

Technologically advanced, ultra comfortable skates

Endorsers/ Partnerships

Sidney Crosby is strongly associated with the brand; Patrice Bergeron; Jason Spezza; Pavel Datsyuk

Patrick Kane; Evgeni Malkin, Staal brothers; International Ice Hockey Federation; Hockey Canada; Hockey USA; Nike

NHL; sponsor of the Canadian Hockey Association; Dan Heatley; Henrik Zetterberg; Jarome Iginla

Image

Stylish, innovative, and modern

Stylish and built to last

Trustworthy, proven and an innovator in stick technology

ProductDriven;

Positioning

“The technology brand”; provides performance for the success-driven player

At the high end of the market, the leading brand, stylish long lasting equipment

Trustworthy; Innovator in stick technology; first company to launch the one-piece composite stick

Niche player that specialized only in high-end, technologically advanced, ultra comfortable skates.

Marketing

Strong and diverse

Diverse media outlets and heavy reliance on professional

Focuses on mass media and professional exposure

Word-ofmouth comms; minimal presence online; Strong

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endorsements.

emphasis on retail and staff education

Other competitors included Sherwood, Vaughn and Warrior, but their presence was of little concern to CCM. Product Environment Hockey equipment can be classified into 5 categories: goalie, head/face, protective, sticks and skates. Industry insiders refer to the last four as “Head-to-Toe.” A company that offers equipment in all five categories is therefore referred to as a “goalie and head-to-toe” brand. Other companies are referred to as “head-to-toe” if they manufacture everything except goalie equipment. Goalie equipment is distinctive because the goalie needs special protection.

Most industry observers agree that the market for hockey equipment is showing signs of maturation and hockey skates, together with sticks, are what drive the industry. Skates are often named and players often identify with specific skates from different companies.

Hockey equipment is sold through pro-shops, independent retailers, mass merchandisers and general sporting goods stores. In general, skates are sold at different price points. Quality high-end skates, with the best features, benefits and materials, are priced between $400 and $700. Medium quality skates are priced between $199 and $399 and low-end skates are priced below $199.

In the past, CCM has typically launched a new product in November at a sales meeting and then introduced the product into the market in March/April. The strategic timing of this ensures that the new skate builds momentum in the late spring and is available in the Summer when the majority of sales for new skates are made; sales then taper off at the end of Summer when the “back to school” period hits.

Company Analysis The CCM brand has experienced a sharp decline in sales and profits since its peak year in 2004. It is now ranked third in market share for skates, behind Bauer and Reebok. CCM has fallen out of the consideration of elite players and has shifted its focus toward entry-level products since sales declines have come almost exclusively from the elite product category. This re-launch presents a significant challenge for CCM because a number of quality and marketing missteps have occurred since the market introduction of the U+ Pro skates two years earlier.

During its long history CCM has developed its image as a classic, traditional and authentic company that make long-lasting and reliable equipment. CCM positions its brand with the tagline, “Performance Within.”

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SWOT Analysis Strengths

Weaknesses

Company Industry ● During its long history CCM has developed its image as a classic, traditional and authentic company that ● The industry is very conservative and old make long-lasting and reliable equipment. school; many of the independent stores do ● Over the years, CCM introduced a number not use the internet, Facebook and Twitter of innovative technological features into (pg.6) the world of hockey (pg.5) Company ● CCM is ranked third in market share for skates, behind Bauer and Reebok. ● The CCM brand has experienced a sharp ● CCM is the only company that decline in sales and profits since its peak manufactures its top model skate in year in 2004. It has fallen from being a Canada leader to now being third in the market ● By including the content of U+University after Bauer and Reebok (pg.8) on this site, CCM is further educating ● Recent CCM products have not lived up those who are not able to attend the to expectations (pg.8) Montreal product knowledge sessions ● CCM is unable to replicate past successes (pg.10) (pg.8) Product Product ●

U+ Pro skate is the only true custom-fit skate on the market. It also features the Rocket Runner, a new blade technology.

Both of these new technologies result in the lightest skate on the market, as well as the most thermo-formable. ● U+ Pro skates’ new design has tested exceptionally well in focus group across North America and Europe. ● CCM learned from past models to vastly improve the fit (pg.11) ● U+Pro Reloaded have addressed all the product difficulties experienced in 2008, but did not change the overall ‘look’ (pg.10) Marketing

●

A physical inspection of the product does not provide the buyers with much additional information (pg.3) ● Shortly after the initial launch of the U+ Pro skate, it became apparent that it was experiencing quality issues (pg.9) ● With the improvements made to the skate, CCM can no longer claim that the skate is the lightest on the market. ● Quality and marketing missteps preceded the upcoming relaunch of the U + Pro Skate Consumers ●

Credibility with ‘the Boss’ and retail partners has slipped (pg.8)

Timing ●

Floor staff has been educated on the benefits of the improved skates, and they can introduce that to customers.

●

The new design will hit the stores in the fall of 2010 which is risky because much of the sales for new skates are made in the

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summer and tapered off at the end of summer with “back to school”. So most people will have already bought their skates.

Opportunities

Threats

Industry

Industry

●

●

● ● ●

The market is concentrated in Canada, the United States and Europe (pg. 2) Overall global hockey equipment industry sales is gradually increasing (exhibit 1) Hockey is engrained in the psyche of Canadians and it is seen by many as their game - a national activity.

Hockey skates, together with sticks, are what drive the industry (pg.3)

● ●

Consumer

●

●

●

Some members of the most important consumer group (12-18 year old) go through two pair of skates in a season because they are growing.

●

● ●

The hockey equipment industry has experienced relatively flat sales over the past few years, along with a number of mergers and acquisitions among companies in the industry (pg. 1) The market for hockey equipment is showing signs of maturity (pg. 2) In Canada, soccer has overtaken hockey as the most popular game among younger demographic groups (pg. 2) In the United States, playing hockey is also expensive (pg.2) Relative to soccer, hockey is an expensive game to play (pg.2) There are relatively few rinks, so the cost of ice time is expensive and a significant amount of travel is often required of players (pg.2) Percentage of players who eventually played professionally was less than 0.1 percent (pg.2) The global hockey equipment market is extremely competitive (pg.6)

Product ● ●

missteps had occurred since the launch of U+Pro skate two years earlier (pg.1) Apart from weight, most of the quality features are hidden from the buyer (pg.3)

Distribution ●

There are no sporting goods retailers in the U.S. that is nationwide. This creates a major challenge for the distribution of hockey equipment in the U.S. (pg. 4)

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Problem Statement What target audience, budget allocation and positioning strategy should CCM Hockey choose for launching its next generation of U+ Pro Skates?

Critical Factors 1. Target Audience - each of the target audiences highlighted in the case have certain concerns that are important to consider when targeting each segment. Also, each consumer segment has an influence on the positioning strategy CCM should choose for promoting its skates.

2. Budget Allocation - considering the importance that each target consumer segment puts on various aspects of the branding and sales path, it is key that CCM effectively allocate their budget to emphasize the categories on which each segment puts the most weight.

3. Distribution Channels: Seeding/Education of Sales Representatives - all potential target segments care about conducting effective research and becoming educated on the brand and product that are going to invest in. However, some segments care more about the overall brand image while others are more rational decision makers and care more about product value and performance.

4. Marketing/Advertising a. Endorsements (Events/PR) - some consumer segments care about brand image and endorsement from famous athletes and have needs for personal expression. b. Social Media and Internet - potential target audiences include young people in age range from 12 to 20 years old that use heavily social media and Internet. c. Point-of-Purchase - some customers from potential target segments value brand performance less care about NHL endorsements, and could be easier influenced by shop assistants and more aggressive advertising at point-of-purchase.

5. Negative consumer and distributor experience surrounding previous product launches - U+ Pro skate, which was launched in 2007, experienced quality issues.

Although these issues did not affect the performance of the skate, customers experienced frustration, and CCM lost credibility with target audience and retail partners.

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Solution 1: Target Smart Performers / “the Boss” Segment; Keep Existing Budget Allocation This solution includes targeting Smart Performers / “the Boss” Segment and keeps the budget allocation that was created when the campaign was launched in the 2007-2008 season.

Positioning CCM positions the U+Pro Reloaded as the next generation of hockey skates. Since the target audience is the Smart Performers, who value superior product design and performance within budget, CCM should position the new product as refined technology. The company cannot advertise the new skate as the most lightweight on the market, but it still has great performance characteristics and customized construction for maximum energy transfer.

Distribution CCM uses their independent sales agents, who are commission-based, to sell their products to the different distribution channels. They also have an in-house key accounts manager that takes care of major clients. In the rest of Europe, besides Finland and Sweden, CCM sells through distributors. In addition, the team has a sales force that services all team business such as NHL, AHL and CHL players. It also sells at the mass merchandisers’ level. When relaunching its U+Pro Reloaded, CCM needs to focus on rebuilding the relationship with their independent dealers. Inviting them to Montreal for learning sessions and training them to become qualified floor staff is the first step in that process.

Marketing CCM runs print ads featuring creative in all hockey publications, and employes digital marketing on YouTube and ccmhockey.com. It also engages with grassroots events in conjunction with hockey camps. CCM should also use its revamped 3point5.com website to train more dealers who could not attend the in-person seeding session.

Budget Allocation CCM invites its top dealers to attend knowledge sessions to re-establish the relationship with its independent dealers. Those who attend the session will become fitting specialists, and will talk to consumers about the improved benefits of the newer skates. The U+University helps train staff from all over the world. The launch will start in the fall of 2010, during “back to school” season.

This solution targets 12-17 Smart Performers. With a launch budget of $1 million. The budget allocation is as follows: 15 percent media and internet, 12 percent production, 9 percent creative, 10 percent point of purchase, 20 percent events/PR, 5 percent research, 3 percent seeding, 16 percent sales and marketing, and 10 percent miscellaneous.

9 Table 3. Original Budget Allocation

Pros: 1. The Smart Performers segment, age 12-17, are growing, and therefore regularly need new skates.

2. The Smart Performer segment consists of 45 percent of consumers. It is the second largest segment in the hockey equipment market.

3. Reaching “The Boss” at this age will promote brand loyalty as they continue their hockey and skating careers.

Cons 1. Credibility with ‘the Boss’ has slipped.

2. The Smart Performers group does not care about NHL endorsement or the need for personal expression, therefore 20 percent budget on PR and events may be excessive and not hit the right target audience.

3. By allocating only 3 percent of the budget for the seeding strategy, CCM may be missing an opportunity to invite more independent dealers to their U+University. This also limits educational resources they can offer on the internet.

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Solution 2: Target Smart Performers/’the Boss’ Segment; Adjust Budget Allocation This solution includes targeting Smart Performers/’the Boss’ Segment and adjusting the budget allocation in a way that will reach target audience under new circumstances.

Positioning The Smart Performance segment are rational decision makers and as a consequence, they are sensitive to price. This is largely due to the fact that they usually need more than one pair of skates in a year and, because of their age, their parents pay for the hockey equipment. To justify the high price and regain the trust of the target audience, CCM Hockey should position U+ Pro Reloaded Skates as high quality skates. This segment values superior product design and product performance criteria, and CCM should mention U Foam, which makes the skate custom-fit for maximum energy transfer, and the Rocket Runner, a new blade technology that provide superior performance characteristics.

Distribution Use the same distribution channel as solution number one, however, because CCM will allocate more of their budget to the seeding strategy, they must leverage their resources that contribute to training their dealers and creating floor staff members who actively engage in conversation with consumers to explain the value proposition of these new skates compared to the older version.

Marketing Use the same marketing spending as solution number one, but change the budget allocation to spend more on point-of-purchase, because this will appeal to the target audience when they shop in-stores and will provide a clear direction to the location of sales. CCM should also allocate more money on media and internet. It will give the company great advantage in reaching target audience because the use of internet this age group engages.

Budget allocation CCM should increase the budget allocation for seeding strategy up to 6 percent because the Smart Performers segment cares much more about product performance, and staying within a strict budget. This strategy hinges on the idea that by having more floor staff who can convey the value proposition of these new skates to prospective buyers, the target audience will see that although the outside of the skates still look the same, the inside quality is greatly improved and will help the players perform better on the ice. In addition, CCM will also increase its media and internet budget allocation to 16.5 percent to attract more internet users. Based on the fact that this age group is growing and needs new skates very frequently, we recommend that CCM develop a loyalty program that allows customers to purchase a new pair of skates twice a year so they will stay within the CCM brand for the next purchase.

11 Table 4. Adjustment of Budget Allocation

Add allocation to: ● Media and Internet (+ $15,000) ○ The target audience for this solution, 12-17 year olds, is very enmeshed in social media and technology as a whole. Overall, this segment is one of the largest consumers of media. As a result, we suggest adding ~$15,000 of the budget allocation to this category to ensure that CCM is constantly reaching their target audience. ● Point-of-Purchase (+ $10,000) ○ This target audience doesn’t care as much about NHL endorsements compared to the older 18-20 year old Performance segment. As a result, their opinion of a brand and it’s products will largely come from the information they find online as well as the branded materials they see in stores. As a consequence, we suggest allocating additional funds to the point-of-purchase category to make sure all CCM materials and products are attractive to potential customers. ● Seeding (+ $30,000) ○ Due to the fact that this target audience are rational decision makers who consider both value and product performance, it is key that CCM ensure that their sales representatives are knowledgeable and can help potential customers understand the value proposition of CCM’s skates.

Reduce allocation: ● Production (- $15,000) and Creative (- $10,000) ○ Large budget allocations for production and creative are necessary when targeting consumers who weigh brand image and expensive advertising (e.g., TV commercials, billboards) over everything else. Because the target segment for this strategy care more about product value and product performance, it is reasonable to pull some of the budget allocation from these two categories in order to invest it into categories that will be more effective with our target audience (e.g., media and internet, seeding, and point-of-purchase).

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● Events/PR (- $30,000) ○ Due to the fact that this target audience has little interest in NHL endorsements, we suggest pulling some of the budget allocation from this category because it will be used more effectively elsewhere.

Pros: 1. Since the new U+Pro Reloaded skate looks exactly the same as the old version, the seeding strategy allows floor staff to proactively explain the difference to customers.

2. Customers will spend less money on buying the same shoes if they make the second purchase within one year, thus CCM can maintain customer loyalty with the brand.

3. As the strategy spends more money on the internet campaign, more people will benefit from additional floor staff being educated about the product value, even if they could not attend to the Montreal knowledge session.

4. The Smart Performers group is growing, and therefore regularly needs new skates.

5. The Smart Performers segment frequently uses internet to search for information.

Increasing media and internet budget allocation will help achieve a higher impression and sales goal for U+Pro Reloaded skate.

6. The seeding program will help regain independent retailers confidence in the product.

7. Reaching “The Boss” at this age will promote brand loyalty as they continue their hockey and skating careers Cons 1. Credibility with ‘the Boss’ has slipped.

2. Many independent stores do not use computers and many are not familiar with the internet. Training them on the new features of U+Pro Reloaded skate will be a challenge.

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Solution 3: Target Personal Expression and Performance Group Segment; Change Budget Allocation This solution involves adjusting the target audience and budget allocation. This solution suggests that CCM target the Personal Expression and Performance Group Segment and allocate the budget in another manner compared to the budget composition in the 2007-2008 season.

Positioning Because Personal Expression and Performance Group Segment members respond well to endorsement of famous NHL players and care about brand popularity and brand reputation, the new U+ Reloaded Pro Skate should be positioned as a high-end skate that is used during the most important tournaments and games. This skate is custom-fit and fully customizable for reflect consumers’ style and personality in a best way. The U+ Pro Skate featured U Foam and the Rocket Runner, a new blade technology.

Distribution Due to the fact that this target segment (18-20 years old) is most influenced by endorsements and online information, the in-store purchase experience is less important. Moreover, by the age of 18, most people’s feet have stopped growing. As a result, these consumers should already have a good idea of their preferred size and skate fit. Thus, they do not need to try on multiple size options in a store and instead can go online and be more confident with an online purchase.

Given these facts, CCM should aim to distribute more of their skates online for this strategy as opposed to pushing sales through independent retailers.

Marketing Use the same marketing strategy as solution one. This is based on the fact that this target audience cares more about image, brand reputation and a brand that can reflect their style and personality. CCM should allocate more of the budget towards NHL endorsement to attract this group. Reduce the budget for point-of-purchase since this group cares more about the recommendations from coaches, online forums and sales staff before purchasing rather than the in-store appearance of displays. They should also add more to the media and internet spending because the target audience relies heavily on social media and the Internet when searching for information regarding new skates and equipment.

Budget allocation CCM will target the Personal Expression/Performance group, 18-20 year olds. Since this group is concerned with image, brand reputation and popularity, this strategy will focus more of the budget allocation toward NHL endorsements. At the same time, they will partner with numerous leagues to let the coaches and athletes “test-drive” the skates before investing such a significant amount of money. This should ensure that customers do not have any buyer’s remorse or cognitive dissonance about spending so much money on their skates. As a consequence, the number of return customers will hopefully increase. The Performance group then would search for recommendations from coaches, online forums before purchasing.

14 Table 5. Adjustment of Budget Allocation

Add allocation to: ● Media and Internet (+ $15,000) ○ The target consumers for this strategy want the brand to reflect their style and personality; they are emotionally driven and are looking for leading edge technology. Moreover, they are still within the age range of high media consumers. Due to these facts, it is imperative that CCM focus a good portion of their budget allocation on their media and internet efforts. ● Events/PR (+ $15,000) ○ The target consumer for this strategy cares greatly about the image of the product, personal performance, brand reputation and brand popularity. They also respond well to endorsements from players in the NHL and seek recommendations from coaches, online forums, and sales staff before purchasing. Given these facts, it is important for CCM to focus more of their promotional efforts and budget on the events and public relations category to increase the overall brand image and endorsements.

Reduce allocation: ● Point-of-Purchase (- $20,000) ○ The target consumer segment cares much less about in-store advertising efforts and much more about the overall brand image across social media, elite players, and the top hockey organizations. As a result, CCM can sacrifice some of their instore point-of-purchase budget in order to put it toward more lucrative advertising efforts. ● Seeding (- $10,000) ○ Although this consumer segment relies on produce recommendations from coaches, online forums and sales staff, those recommendations are not as important as the overall brand image and the consumer’s personal and emotional connection with the brand. Given this fact, CCM should take a small portion of the seeding budget allocation and reallocate it toward more effective categories (e.g., media and Internet, and events/PR)

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Pros: 1. The Personal Expression and Performance group makes up 49 percent of consumers, which is the largest segment among the three consumer segments.

2. This group cares about brand reputation. Thus, celebrity endorsement will influence this group’s purchasing decision.

3. The seeding program will help regain independent retailers confidence in the product.

4. Point of purchase can attract customers’ attention and direct people to the right place to purchase the skates.

5. Price is not a barrier for this segment.

6. Other manufacturers mostly focus on ‘the Boss’ segment, by focusing their efforts on a different segment, CCM would have less competition for this target audience.

Cons 1. Since the group cares about image and personal style, it is hard to differentiate the new U+Pro appearance from the old version. By only improving the fit, this target group may not be convinced to switch back to this new skate.

2. Since the Personal Expression and Performance Group Segment is less influenced by recommendations from the staff at stores, the budget allocated for seeding is less.

Because of this, the suggested strategy would not restore the relationship between CCM and their distributors.

3. Most manufacturers focus on the younger target audience (12-18 years old), and by the age of 18, this target audience is already loyal to some brand. CCM should put much effort to lure them because this will pose a significant challenge for this solution.

4. By ignoring The Boss, an opportunity to continue to provide them with skates as they progress through their hockey and skating careers may be missed.

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Recommendation Solution 2: Target Smart Performers/’the Boss’ Segment; Adjust Budget Allocation We recommend CCM choose solution 2; targeting the Smart Performers/’the Boss’ segment, adjusting the budget allocation to focus more on Seeding, Media and Internet, as well as Pointof-Purchase materials and spending less toward Production, Creative and Events/PR. We think it is imperative that CCM hit consumers when they are young in order to build brand loyalty and allow the players to grow with the brand. If CCM chose to target the 18-20 year old segment, they would face a significant challenge of persuading consumers who are already loyal to other brands to switch over to the CCM brand. Moreover, ‘the Boss’ age group needs more skates and as a consequence, targeting them will provide more sales opportunities for CCM. A re-launch of U+ Pro Skate will help CCM achieve their objectives from their previous campaign launch in 2008 (pg. 8): 1. Superior skates with no quality issues would re-establish CCM’s credibility as a high performance skate brand among elite players. CCM allocates 17% of its budget for events and PR, and it will be used to emphasize endorsement with the leading NHL players.

2. The new re-launched product address all the product difficulties experienced in 2008 and in order to inform customers and retails partners, CCM will increase spending on seeding by 100% compared to the previous budget.

3. The above point will help create consumer pull at the retail level around the U+ story and will help retail partners regain the confidence they had lost in CCM. 4. After a successful re-launch, the company may translate this technology to mid and entry price point products and will have an advantage by working with that segment.

5. In order to create a solid connection to the technology story and platform across key product categories CCM should position its new skate as a high quality skate that provides superior performance characteristics.

Moreover, the case states that successful market launches require the product to be innovative, used and validated by the pros and to have a performance/technology story that creates a unique selling proposition. All three components are needed in order for CCM to ensure the best chance of a successful launch. The components are as follows: 1. Product Innovation The new CCM U+Pro Reloaded remains the thermo-formable U-FORM technology, takes the unique shape of each individual foot when heated, no sandwich layers, or pre-set shapes like competitors. The fit has been vastly improved and has tested exceptionally well in focus groups across North America and Europe. The product overall ‘look’, however, has not changed. Since CCM targets Smart Performance group, this segment values superior product design and performance and puts more weight on the advice and expertise of experienced salespeople as opposed to endorsements by famous hockey players. To influence them more, allocating a larger segment of the budget toward seeding that allow the floor staff to explain the benefit behind the new U+Pro Reloaded would help the consumers to differentiate the old version and new version.

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2. Pro Validation Although the proposed strategy does not rely as heavily on professional endorsements as the third solution, partnerships with players and other endorsement deals are still important, particularly during the initial stages of a product launch. While the target market for this recommendation do not put as much weight on NHL endorsements, it is still important for CCM to use their players to prove that the product is tried, tested and validated by the best of the best.

However, because CCM is choosing to launch this product in the fall as opposed to late spring, they need to find an innovative way to create a pre-launch campaign to build hype around the product during the key skate purchasing period (the standard late spring launch dates are strategically timed to coincide with the NHL Playoffs when the best elite players are competing for the Stanley Cup). Because they cannot leverage the standard timing of launches, CCM should create a pre-launch campaign that focuses on their players preparing for the upcoming season (which starts in October). They can create relatively cheap content by highlighting the practice and preparation that typically goes on off camera.

3. Marketing Communications Because the credibility with ‘the Boss’ and retail partners has slipped, it is crucial that CCM create a comprehensive advertising and marketing strategy to appeal to these consumers and retail partners again. In order to accomplish this, CCM will have an integrated marketing strategy across media and internet, social media, NHL player endorsements and all other advertising efforts.

The comprehensive seeding strategy suggested for this solution will ensure that CCM will get in the hands of both influencers and key players. Additionally, all CCM sales staff will be highly educated on the benefits, quality and overall value of the skates through both the U+University and CCM’s online educational materials. Because CCM needs to overcome the hurdles of their past launch fails, these things taken together will help potential customers understand the value proposition of the new skates and hopefully pull in customers they lost due to the past debacles.

Additionally, the target audience relies on retail staff recommendations and may make a final decision about purchasing a pair of skates in a shop. As a result, CCM will also increase the budget allocation for point-of-purchase advertising because this is a key moment in the purchase path of this target consumer group. In addition to that, the company needs a pre-launch teaser campaign and POP ads as well as encouraging store staff to potentially convince customers to wait several months till the re-launch of the U+ Pro Skates before purchasing skates in order to receive a better deal (which is a very important part of the purchase decision for the target audience).

Therefore, using this strategy CCM would meet customers’ needs, restore slipped credibility with the target audience and retail partners, meet the campaign objectives, and re-establish company’s reputation as a manufacturer of high-quality skates for elite players.