Cabela's Case Study

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5-106-001 TIM CALKINS Carolina Lunker Sauce Russ Cobb was excited. It was July 16, 2004, the third and last day of the annual ICAST (International Convention of Allied Sportfishing Trades) convention, the major trade show in the sport fishing industry, and he had just received the first order for his new product, Carolina Lunker Sauce, a fishing attractant. Russ spied his brother Matt across the convention center, and ran over to him. “Hey, Matt,” he exclaimed. “I’ve got terrific news! Cabela’s is going to carry Lunker Sauce!” Cabela’s was the nation’s largest direct marketer and a leading specialty retailer of hunting, fishing, camping, and related outdoor merchandise. Matt gave Russ a high five. This was big news. Russ continued, “The…show more content…
In 2001 more than 28 million people went freshwater fishing, about 13 percent of the population. While many people went fishing in a given year, most did so infrequently. Indeed, almost 57 percent of anglers fished just a few times a year. About 40 percent of anglers were serious anglers, who fished more than fifteen times a year on a recreational basis (see Exhibit 1). Less than 4 percent of anglers participated in fishing tournaments and were considered competitive anglers. ©2006 by the Kellogg School of Management, Northwestern University. This case was prepared by Professor Tim Calkins and Matt Cobb ’06. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 847-491-5400 or e-mail cases@kellogg.northwestern.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise— without the permission of the Kellogg School of…show more content…
It was relatively difficult to get distribution because people were skeptical about the high price point. In particular, the Cobbs found it difficult to attract the interest of the bigger distributors in the industry. As a result, they failed to achieve anything meaningful in terms of sales. The Cobbs decided to invest in a booth at the primary industry trade show, the ICAST. This event was attended by hundreds of industry insiders, including all the key buyers in the industry. The Cobbs set up a booth at the show and began promoting the product aggressively. They actively looked for buyers and enthusiastically pitched the product idea. Unfortunately, while many people were interested in the product, few stepped up to place any orders. By the morning of the third day, the Cobbs were starting to question the wisdom of launching the product at all; they had already invested a lot of time and money in the product, and without any substantial sales, there seemed little reason to continue. When Cabela’s expressed interest in the product, everything changed. At least one leading retailer was prepared to carry the product. For Russ, the opportunity was a clear win; while Cabela’s would need a retail price of $7.99, the product would be in the market and selling. Matt, however, wondered if the price was too

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