Cima Mountaineering Case

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Cima Mountaineering, Inc. Case Problem: Cima Mountaineering Inc. is facing the task of deciding between two marketing plans, proposal 1 by its President, Margaret Simon and Proposal 2 by its Vice President, Anthony Simon. Each proposal has been laid out in a memorandum and considered from a product, promotional, distributional, and positional point of view. The views expressed in the memorandums give a great perspective from a qualitative stand point but in order to properly resolve the problem a quantitative analysis is necessary. Sales for 5 years have been forecasted relating to each plan by two project teams assigned by Harris Fleming, Vice President of Marketing. The possibility of entering into mail order catalogues is also an option to be considered. The catalogue could help reach the eastern half of the country and expand the geographical sales possibilities but might also cause cannibalization on the western half. Analysis: Proposal 1 consists of introducing 2 new boots aimed at the “weekender” market, a high growth segment within the market for Cima products. The 2 new boots would be called the WX 450 and the WX 550. The WX 450 would profit $5.18 per pair in its first year (97-98) and rise each year after that until its fifth year (01-02) when it would profit $7.13 per pair because of a 4% annual increase to Cima selling prices and a 3% annual increase in marketing and manufacturing costs.. The estimated total sales over that 5 year period would be 72,900 pairs of WX 450. The total profit WX 450 would make over that 5 year period is $472,929. The profit per pair and total profit for each year (97-02) is displayed in Exhibit 5. The WX 550 would profit $6.67 per pair in its first year (97-98) and rise each year after that until its fifth year (01-02) when it would profit $9.21 per pair because of a 4% annual increase to Cima selling

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