Swisher Mowers Case
Swisher Mower and Machine Company
Evaluating a Private Brand Distribution Opportunity
Define the Problem
Should Swisher Mower and Machine Company accept the private-brand distribution proposal made by a major national retail merchandise chain? If so, under what agreement conditions?
List the Alternatives
1. Accept the private-brand distribution proposal
2. Employ a more aggressive advertising and sales effort to enter new markets recruit new dealers and assist current dealers
3. Initiate an expanded line of “trailmowers”
Evaluate the Environment * Lawn and garden equipment is primarily for the consumer market * At manufacturer’s prices, the lawn and garden equipment industry produced sales of $5 billion in 1995, 74% for finished goods, 25% for engines and 1% for components * Riding unit sale volume is cyclical * Riding lawn mower industry is highly seasonal: 1/3 of sales occur in March, April and May * Private label mowers account for 65-75 percent of total industry sales * National retail merchandise chains account for the largest percentage of sales of outdoor power equipment * 90% of total industry sales occur at national retail merchandise chains, outdoor power equipment/ farm equipment and supply stores, lawn and garden stores, discount department stores, home centers, and hardware stores
SWOT Analysis
Qualitative Analysis 1. Accept private branding proposal
Pros
* Minimal marketing expenses (e.g., advertising, promotion, selling) incurred by the manufacturer since these expenses are incurred by the intermediary (e.g., retailer or wholesaler) * Provides access to distribution channels and/or consumers not presently carrying the manufacturer's brand * The opportunity to triple SMC riding mower unit volume from 4,100 units annually to 12,300 units since the annual order could be 8,200 units. * Ability to operate at full capacity; overtime affordable. * Further access to
Evaluating a Private Brand Distribution Opportunity
Define the Problem
Should Swisher Mower and Machine Company accept the private-brand distribution proposal made by a major national retail merchandise chain? If so, under what agreement conditions?
List the Alternatives
1. Accept the private-brand distribution proposal
2. Employ a more aggressive advertising and sales effort to enter new markets recruit new dealers and assist current dealers
3. Initiate an expanded line of “trailmowers”
Evaluate the Environment * Lawn and garden equipment is primarily for the consumer market * At manufacturer’s prices, the lawn and garden equipment industry produced sales of $5 billion in 1995, 74% for finished goods, 25% for engines and 1% for components * Riding unit sale volume is cyclical * Riding lawn mower industry is highly seasonal: 1/3 of sales occur in March, April and May * Private label mowers account for 65-75 percent of total industry sales * National retail merchandise chains account for the largest percentage of sales of outdoor power equipment * 90% of total industry sales occur at national retail merchandise chains, outdoor power equipment/ farm equipment and supply stores, lawn and garden stores, discount department stores, home centers, and hardware stores
SWOT Analysis
Qualitative Analysis 1. Accept private branding proposal
Pros
* Minimal marketing expenses (e.g., advertising, promotion, selling) incurred by the manufacturer since these expenses are incurred by the intermediary (e.g., retailer or wholesaler) * Provides access to distribution channels and/or consumers not presently carrying the manufacturer's brand * The opportunity to triple SMC riding mower unit volume from 4,100 units annually to 12,300 units since the annual order could be 8,200 units. * Ability to operate at full capacity; overtime affordable. * Further access to