Creekside Outdoor Gear is a Philadelphia-based company that produces and markets clothing sold exclusively in retail stores specializing in apparel for outdoor enthusiasts. The product line includes shirts, pants, jackets, ski-suit bibs and jackets, hats, gloves, and underwear. The stores also sell equipment for mountain climbing, kayaking, skiing, snowboarding, canoeing, and hiking, items for which Creekside’s products are a natural complement. Creekside is known throughout the Northeast for high quality. Joe Edwards, Creekside’s founder and owner, often tells his employees, “If you provide a quality product, people will want to buy it from you.” However, Joe is beginning to detect some changes in his business and is wondering how those changes will affect his company.
One change that Joe has noticed is that the customers visiting the retailers that carry his products look younger and younger. As a member of the baby boomer generation, Joe realizes that his peers are getting older. The group of customers that has spurred his company’s growth since its founding in 1978 will likely be a smaller piece of his business in the future. Joe has also noticed the growth in extreme sports. Not only are the people who participate in these sports youngsters, but they also have unusual (to Joe) buying habits. They seem to want what Joe would describe as a sloppy look and attractive color schemes at the same time.
Such customer desires take advantage of new, high-tech materials that provide greater warmth with lighter materials, which support the increased mobility needed to participate in extreme sports. Joe has never used these new materials and he wonders how they would work in his production process. Finally, Joe is concerned about the buying power of this new group of potential customers. Do people in their late teens and early twenties have enough income to purchase Joe’s products, which typically command premium prices?
Another concern is geographic expansion. To help offset the impact of some of the trends described above, Joe would like to sell his products in stores in Colorado, Utah, Wyoming, Oregon, and Washington. However, Joe has always been a regional producer (Northeast U.S.), and such an expansion will require a significant investment. Establishing distribution channels and developing relationships with buyers is both expensive and time consuming.
Furthermore, Joe doesn’t employ a sales force. His operating philosophy has always been that a good product will sell itself. Consequently, he’s wondering how best to represent his product to outdoor store buyers in those Western states.
One factor that keeps weighing on Joe’s mind as he thinks about these issues is that he believes in developing relationships with his retail partners. Joe has read some information about transactional selling and relationship selling, but he’s not at all sure how either one of these methods is actually implemented. Nor does he know how to decide which method of selling will better meet his objectives for sales in the Western states. Needless to say, Joe has much to consider as he decides whether or not to pursue expansion. If he does decide to expand, he needs to determine how best to set up his sales force.
1. Identify and explain aspects of the internal environment that are affecting Creekside Outdoor Gear’s business. What external environmental factors are especially important to Creekside Outdoor Gear and the decisions that Joe faces?
Why?
2. If Joe interviewed two different candidates for a sales position, one who has been using a transactional approach to selling and the other who has been using a relationship selling approach, how would he recognize the difference between the two?
3. Should Joe hire a sales manager and allow him or her to hire a sales force, or do other options exist? Why?