Love. Spare Time - Case Study Example

Running Head: Spare Time Equipment of Module #, Assignment # With no prior business knowledge, for Mark Zimmerman Spare Time Equipment had always been a gamble, he did not venture into the business with a plan in mind rather he thought it was a bargain since he only had to pay the price of the inventory. From his previous work experience it is evident that he has mostly been associated with the sales side of business as compared to the product side. AN increase in the product offering would further result in a corresponding increase in the wages paid to the additional workers required to manage the product inquires as seen when lawn mowers, trimmers and tractors were added to the product line.

Furthermore, many businesses have been seen to make cost leadership their strategy, business such as Wal-Mart adhere to cost leadership in order to differentiate and maintain their competitive advantage, but Mark does not want to opt for that option either. The fact that no other retailer within a five-mile radius offers the brands being offered by Mark is an edge Mark has over the other retailers if the quality of the brands being offered by him is perceived to be superior by his customers. Even then it is just a matter of time till the growing trend of e-commerce engulfs this point of differentiation of Spare Time Equipment.

The facts stated above show that as of now, Spare Time Equipment does not have a sustainable competitive advantage and customers do not come to an outlet just to make friends and build relationships. One thing which Mark has been doing right is to try and differentiate himself on the basis of the service Spare Time Equipment provides over other retailers, the tagline “We do it right the first time” is attention grabbing and has a feel of excellence in business. As mentioned above, most of Mark’s experience has been in the services sector; therefore differentiating on the basis of providing good service seems very apt and achievable.

However, in order for people to avail the services at Spare Time Equipment it is essential for people to first buy the product for which Mark needs to become more flexible. Some amount of consumer promotion to introduce the product with the customers would do more good to Mark than harm. Promotions of limited time discount offers could be run on the radio spots and print ads which Mark has previously used to create awareness about Spare Time Equipment. This would help increase customer traffic at Spare Time Equipment and then it would be up to the sales staff to seal the deal.

If Mark does not want to reduce the price of his products then he could try to introduce a product bundle for example a offering a lawn mower at a 20% discount on the purchase of a snowmobile. Mountain bikes seem like a promising product addition for Spare Time Equipment, particularly because of the fact that snowmobiles, jet-skis, pleasure boats all are usually purchased by people who are looking for more adventure in their life than provided by the monotony of a daily routine. Consequently, mountain bikes only complement such a product offering and there are chances that a customer who might visit the store to buy a snowmobile might come in next time to purchase the mountain bike, provided he is happy with the level of service and the product quality of the snowmobile.

Since the industry sales are also growing and are far from coming to a decline as predicted by the manufacturer’s sales representatives it appears to accompany less risk and more return. Most importantly, mountain bikers are occasionally in need for services for their mountain bikes and that is what Spare Time Equipment promises to deliver better than the competition. Since Mike would not even have to pay for the initial inventory and other costs for the first 90 days he can at least give this a try and see how people are responding to the mountain bikes in the store.

In order to differentiate the store from the bike shops Mark could again capitalize on the services aspect of Spare Time Equipment and offer customers “test rides” along with giving a free helmet for the purchase of every bike in the initial period to drive sales. Moreover, Spare Time Equipment could provide additional services such as free delivery of the mountain bike to the customer’s home and discounts on bike lights, packs and racks etc. Additionally, Spare Time Equipment could offer a 10% off on the first time the customer comes to the store to avail its services regarding the maintenance and repair of the mountain bike.

If Spare Time Equipment were to offer such differentiated services to its customers, chances are that not only would the customers come into the store to buy another product rather they would also refer their friends and relatives to the store.