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Business ACL II Core MME Weekly Assignment

Business ACL II Core MME Weekly Assignment

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Published by kharek

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Published by: kharek on Apr 11, 2010
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Assessment Front Sheet
 IMPORTANT: Your assignment will not be accepted without the FRONT SHEET.Campus: Stream:
Level: ACL-II Year/Semester
Module Name:MMEAssignment Type:Weekly Assignment
Student’s Name: Assessor’s Name:
Issued on:Reqd. SubmissionDate:
Actual SubmissionDate:Submitted to :Higher Level Skills
Students are expected to develop the following skills in this assignment:
Cognitive skills of critical thinking, analysis and synthesis.
Effective use of communication and information technology for business applications.
Effective self-management in terms of planning, motivation, initiative and enterprise.
Certificate by the Student:
Plagiarism is a serious College offence.I certify that this is my own work. I have referenced all relevant materials.________________________(Student’s Name/Signatures)
EXPECTED OUTCOMES Assessment Criteria To achieve each outcomea student must demonstrate the ability to :Achieved (Y/N)
Explore various models of consumerbehavior.Compare and contrast the effect of buyingbehavior model.Explore various techniques of marketsegmentation.Compare, contrast and develop segmentationstrategy.
Assignment Grading Summary (To be filled by the Assessor)Grades Grade Descriptors Achieved Yes/No (Y / N)P
A Pass grade is achieved by meeting all the requirements defined.
Identify and apply strategies to find appropriate solutions.
Select/design and apply appropriate methods/techniques.
Present and communicate appropriate findings.
Use critical reflection to evaluate own work and justify validconclusions.
Ability to anticipate and solve complex tasks in relation to theassignment.
Demonstrate convergent, lateral and creative thinking.
What's the hottest sports/leisure activity in the United States? Basketball? Soccer? Running? Dancing? None of these: It's
in-line skating
. Since 1995, when in-line skating jumped from third to first place, more Americans haveput on their skates and taken to the asphalt than have joined any other participation sport. And as all those Americanshit the asphalt, companies such as Rollerblade have produced a flood of new in-line skate models and types.Knowing that idols such as Madonna and J.F.K., Jr., like to in-line skate enhances the popularity of the sport evenmore.The number of new models and skates attests to the wide ranging motivations Americans have for skating. For some,it's just fun—afternoon exercise in the park and a chance to get some fresh air and sunshine. For others, in-lineskating is serious exercise ideal for maintaining fitness. Still others race or compete on skates or participate in sportsassociated with in-line skates, such as hockey.To keep up with the market, manufacturers of in-line skates carefully study market statistics, looking for changes.For example, an examination of data on the Rollerblade Website (www.rollerblade.com) indicates rapid growth in thetotal number of in-line skating participants, even if growth is slowing a bit. Between 1994 and 1995, in-line skatingparticipation grew 20 percent (compared to growth rates higher than 30 percent in the preceding five years.) Growthreached 22 percent between 1995 and 1996.What do changes in the popularity of in-line skating mean for a company like Rollerblade? Rollerblade pioneered in-line skating in the United States when Brennan and Scott Olson decided to sell in-line skates to hockey players duringthe off-season in the early 1980s. Throughout most of the 1980s, Rollerblade had market shares of around 80 to 100percent. But as in-line skates sales grew, so did the competition. Firms such as K2 entered the market and thecompetitive pressures forced all firms to create distinctive differences between their brands. With its early jump onthe competition and aggressive marketing, Rollerblade has maintained a market share greater than 40 percent, butdoing so requires paying close attention to the market. Recent declines in the growth rate call for examining marketdata even more closely.To understand the market, you must first answer the question, “Who skates”? Thirty-five percent of all skaters arechildren under 12, and 29 percent are teens. But the greatest growth in number of skates in 1996 versus 1995occurred among adults aged 35 to 54 years (a 61 percent increase). When you couple that with the fact that babyboomers—yes, those same 35- to 54-year-olds—are the largest age group in the United States, it doesn't take a rocketscientist to figure out where the potential market growth is. Nor does it take much science to realize that the kids,teens, and adults skate for different reasons.Kids and teens may be in the sport for fun, transport, or sport. Adults are more likely to skate for fitness. Aging babyboomers are attracted to in-line skating because a 30-minute workout on skates burns the same number of calories asa 30-minute run. But it has less impact shock on joints, stronger cardiovascular benefit than stair-stepping machines,and higher activity for muscles of the hips, thighs, and shins than running or cycling. Furthermore, because they findin-line skating to be more fun, participants tend to skate longer than they run or cycle.Besides understanding customer motivations for skating, Rollerblade needs other information, such as where skaterslive, how frequently they skate, their skill levels, and other facts. An examination of statistics on the RollerbladeWebsite indicates that big states like California, Texas, and New York have the largest
of skaters; smallerstates such as Utah, New Mexico, and North and South Dakota have a greater
of skaters. Thus, the bigstates are attractive markets because of their size, but in smaller states, in-line skating is actually more popular andsales may be easier to obtain.
 Children are the most frequent skaters—they skate 11 times per month. Teens skate about 10 times a month andadults only seven times. Overall, the average skater skates about 30 days per year. What does information aboutusage rates mean to Rollerblade? Heavier usage might be associated with more frequent skate purchases to replaceworn out equipment or to trade up to skates with different features such, as faster wheels, better brakes, better fit, andgreater comfort. For these skaters, Rollerblade has to design new models in colors and styles that appeal to each agegroup. As a result, there may be more models and styles aimed at kids and teens than at adults. Statistics tend tosupport this reasoning—more children (83 percent) and teens (84 percent) are classified as advanced skaters thanadults (66 percent). More advanced skaters typically will pay more for skates than beginners. A
magazinearticle indicated that beginners should purchase skates that cost about $100 but more advanced skaters might well payas much as $339.In-line skaters are evenly divided between men and women. But men and women often have different motivationsfor skating and look for different skate styles and colors, prompting Rollerblade to think in terms of men's versuswomen's skates. In-line skaters also tend to be more upscale, with an average household income of $53,000 versusthe U.S. average of $46,000. This could be interpreted to mean that this is an upscale sport— reserved for those withthe money— or that companies such as Rollerblade have priced themselves above the mass market. Believing thelatter, in 1992 Rollerblade introduced its Blade Runner line of affordable skates, protective gear, and accessories forkids and adults. These products are sold by mass merchandisers to separate them from the more expensive productsfound in specialty and sporting goods shops.In order to maintain leadership in an industry, a firm must sell to the market segment that sets the industry standard.In many industries, that's the high-end, high-price product segment. For in-line skates, it's the segment of aggressiveskaters who are the ultimate consumers and who set the standard for performance. For this market, it is extremelyimportant that a brand be distinguished from the skates their parents use. For them, Rollerblade has developed a newline of skates with a logo consisting of a backward R and a B. To understand the needs and wants of these users, andto build a stronger relationship with this segment, Rollerblade invites aggressive skaters such as Chris Edwards to itsfacilities several times a month to work with its R&D people and to test skates.Competition also forces changes. K2 came out with an athletic shoe on wheels, which forced Rollerblade to take aclose look at this concept. In fact, Rollerblade brought out the Synergy line of soft-shell skates—not a fabric skatebut also not the hard model skates of the past. Although Rollerblade officials think most consumers will like the feelof fabric skates in the store, they worry that customers might well be turned off to in-line skating if the fabric skatesdon't last very long or give poor performance. Skating with your toe poking out the front of the shoe is neither funnor safe. Moreover, fabric shoes fail to give sufficient ankle support and to transmit energy, with the result that theyare slower. The Synergy line is intended to remedy some of the defects of fabric skates while still providing theconsumer with a softer shoe.In a market with a slowing growth rate, firms must look for sales in areas beyond their core products. ForRollerblade, these additional sales come mostly from selling active wear. For example, Jacques Moret, an apparelfirm, signed a three-year contract with Rollerblade to sell active wear items, such as T-shirts and mesh shirts, underthe Rollerblade and Blade Runner labels. Many of these items are aimed at women, who are more likely to buyoutfits and athletic wear for specific activities. And, of course, Rollerblade sells protective gear for skaters—helmets,knee pads, and elbow pads. Sales of these items could add millions of dollars to revenues and help to promote theRollerblade and Blade Runner names.But keeping up with the competition is tough. Nike and Reebok are both entering the in-line skating market and bothbring hundreds of millions of dollars to support product development and promotion. Both of these well-knownbrands have strong consumer appeal. Nike has developed a “Reuse-A-Wheel” recycling program in which thesubstance from used skate wheels is reused to make new athletic courts and playground surfaces. Rossignol plans to

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