Marine Craft

Craft Marine Corporation

Situation Analysis

Industry

• Over 100 full-line boat manufacturers in the U.S.

• No one manufacturer holds more than a 10% market share

• Industry average spent on advertising was 0.7% of sales in 2001

• Pleasure Boat industry sales are heavily dependent on general economic conditions

• ¾ of retail boat sales are between march and august

Company

• 1st to produce fiberglass pleasure boats

• Product line includes 32 different models

• Competes on quality and performance rather than price

• 95% of sales in U.S. – The other 5% is in Canada

• Maintains trade relationships with 241 dealers

• Sales Organization are a national sales manager and 2 regional managers

• Spent $600,000 in 01, $500,000 in 00, and $415,000 in 99 on advertising

Trends

• 15% increase in sales

• Advertising focusing exclusively on media print

Problem Statement

Mr. Frank has a dilemma in coming up with a functioning and executable advertising strategy, and must develop one for the coming year that will still allow for an increase in sale by 15% as the previous two years.

Alternatives

A. Spend the same amount as last year

Pros

• Last year’s amount was able to achieve the 15 sales increase

Cons

• The economy is not the same after 9/11

• Prices could have gone up in the advertising area, causing a need for more money to be allocated

B. Spend more than last year

Pros

• It would increase the chance of being able to achieve the 15 sales increase

• It should be able to cover increases in advertising cost

Cons

• The economy is not the same after 9/11

• With a stagnant economy it could prove to be a loss to the company

• Spending more money on advertising does not correlate to more sales

C. Spend Less than last year

Pros

• The economy is not the same after 9/11, so spending less could work in the company’s favor

• They did achieve the 15% increase in 2000 spending less and based on the economy can...