Sophia's Resturant
Overview At the age of 24, Sue Koenig launched Runners World retail shoe
store. Well known and nationally ranked as a runner herself, Sue knew first hand
of the need for athletic shoes uniquely designed for the serious runner. Her
timing was perfect. Word-of-mouth spread and Runners World developed a good base
of loyal and repeat customers. A national health and exercise craze further
fueled the demand for high-end quality running shoes. This was a boon to early
success, and resulted in a steady and profitable growth during the first ten
years of operation. Sue had exclusively chosen Nike's premier line of running
shoes as the cornerstone of Runners World retail product line. For a time,
Nike's strong image and aggressive promotion campaign proved to be a very wise
and solid marketing strategy. However, a number of factors have begun to
adversely affect Runners World's performance. Company growth has come to a
virtual standstill as recent sales have flattened out. Profit levels remain
reasonable but could weaken if some immediate and possibly drastic changes are
not incorporated. Competition, fashion and a wide spread loss of interest in
running have cut into the niche market share Runners World once solely enjoyed.
This has Sue concerned about what to do. When Sue initially started Runners
World, she had a very specific target market in mind - the serious jogger or
runner who wanted the best quality running shoes money could buy. Things were
simple and straight forward, but now the demand and climate is changing.
Customer choices, expectations and needs have expanded. There are many
alternatives that Sue needs to carefully investigate and explore. Fundamentally,
Sue must seriously evaluate whether there is still a large enough market locally
for her particular inventory. Present Strategy In her heart, Sue knows that her
mission is sound - to provide high-end running shoes to those who share her
passion for the sport. There is no question that she reaches her target market.
Her clientele, consisting of the most serious runners, are repeat buyers who
turn running shoes into a staple. They find a shoe they like and stick with it.
The high-end Nikes she currently sells were always well accepted and seen as top
quality. Feeling that change is inevitable if she wants to stay competitive, Sue
knows it is necessary to reconsider the business strategy of her marketing mix.
Although compelled to price her inventory in line with Nike, Sue is still able
to sell the shoes and get a $5 to $7 per pair premium. This has resulted in
attractive profits overall while still remaining competitive in the market. As
trends go, Sue is aware that running is on the decline. Nike running shoes are
still her primary product, but as exercising turned to a kinder, gentler phase,
Sue added a secondary inventory to her store. Hoping to capture a more diverse
market, Runners World added Nike shoes for walking, aerobics, basketball,
tennis, and cross training. These sold well for a while but sales for these
other shoes have also flattened out. Runners World desperately needs to attract
new business.
