The Timberland Co.

, a manufacturer, and retailer of footwear, outdoor apparel, and

accessories, committed itself to institute and communicating a core set of values to
its employees, stockholders, and consumers. The system of beliefs emphasized
community service. Central to this commitment was an alliance with the national
youth community service organization City Year. Over the years, Timberland and
City Year developed a close alliance that both sides contended constituted "a new
paradigm" for the interaction between a for-profit business and a nonprofit
organization.

Timberland LLC is an American manufacturer and retailer of outdoors wear, with

a focus on footwear. It is owned by VF Corporation. Timberland footwear is
marketed towards people intending outdoor use. The company also sells apparel,
such as clothes, watches, glasses, sunglasses, and leather goods.

Timberland's corporate headquarters are located in Stratham, New Hampshire.

Timberland also operates from offices in other parts of the world, such as
Australia. Horween Leather Company supplies leather shells for footwear to the
Timberland Company.

In 1998, Jeffrey Swartz stepped up to become Chief Executive Officer of the

company and brand that his grandfather, Nathan Swartz, uncle, and father had
started.

Timberland is a global leader in the design, manufacturing, and marketing of

premium footwear, apparel and accessories for the outdoor lifestyle. Best known
for the original yellow boot introduced in 1973, Timberland today outfits
consumers from toe-to-head, with versatile collections that reflect the brand’s rich
heritage of craftsmanship, function, and style. Timberland products are sold
throughout the world in leading department and specialty stores as well as
company-owned retail locations and online. Timberland’s dedication to making
quality products is matched by an unwavering commitment to environmental and
social responsibility – to make things better for our products, the outdoors, and
communities around the globe.
 

The family-owned company began its turnaround in 1991 when Sidney Swartz
gave his 33-year old son Jeff Swartz, who had studied business at Dartmouth
College’s Amos Tuck School, day-today control over marketing and other
company operations. His first task was to tighten operations.  By slashing the
number of products nearly in half and filling orders promptly, Swartz reduced
inventory.  That helped Timberland cut costs and allowed the company to trim
some of its high prices.  For example, to capitalize on the shift toward more casual
office dress among white-collar workers, the company cut their price of is
waterproof Weather buck casual men’s dress shoes from $135 to $99.  The price
reduction more than doubles sales.

Timberland always has measured productivity by the size of each delivery, so

department store orders were given priority over those from small retailers.  As
Swartz began to realize that small retail “boutiques” were an increasingly
important share of the business, the company changed its marketing strategy.  It
began by scheduling two or more shipments a week to each customer instead of
one bug delivery.  The company developed an optical scanner system that
automatically tracks inventory and creates shipping bills.  This system handles
small orders as efficiently as big ones.

Another part of the marketing strategy was to open new Timberland outlets.  There
are now more than a hundred Timberland departments, or “concept shops,” in the
United States and around the world and the company now operates in more than 45
countries and international business accounts for 40 percent of its sales.

1. In an essay, discuss in detail the different kinds of needs and indicate how all
these types of needs can be used to increase the market share of Timberland
Company.
 Needs are the basic human requirements such as for air, food, water,
clothing, and shelter. Humans also have strong needs for recreation,
education, and entertainment.

These needs are classified into 5 types:

1. Stated or explicit: the specific “what” the customer asks for

2. Real: what the stated needs actually means; what value the customer is going
to derive from the stated good or service
3. Unstated: what the customer expects implicit with the good or service
4. Unexpected: needs that are not expected or required, but would delight the
customer
5. Secret: needs that the customer does not express, largely because they’re
intangible
These needs can be used to increase the market share of Timberland
Company in which

 By slashing the number of products nearly in half and filling orders

promptly, reduced inventory; this helped Timberland cut costs and
allowed the company to trim some of its high prices
 Realizing that small retail “boutiques” were an increasingly important
share of the business, so the company developed an optical scanner
system that automatically tracks inventory and creates shipping bills. 
This system handles small orders as efficiently as big ones
 Open new Timberland outlets in different countries around the world,
that leads to increase the percentage of sales

2. Explain all the elements of the marketing mix as well as all the variables
under each P and elaborate thoroughly on how the updated four Ps are
interrelated.  Also, indicate from the case all the marketing mix elements.

The marketing mix refers to the set of actions, or tactics, that a company
uses to promote its brand or product in the market. The 4Ps make up a
typical marketing mix - Price, Product, Promotion and Place.

1. Price: Refers to the value that is put for a product. It depends on costs
of production, segment targeted, ability of the market to pay, supply -
demand and a host of other direct and indirect factors. There can be
 several types of pricing strategies, each tied in with an overall
business plan. Pricing can also be used a demarcation, to differentiate
and enhance the image of a product.

For example:
Discounts: the company cut their price of is waterproof Weather buck
casual men’s dress shoes from $135 to $99

2. Product: Refers to the item actually being sold. The product must
deliver a minimum level of performance; otherwise even the best
work on the other elements of the marketing mix won't do any good.

For example:
Brand name: Timberland
Features: Waterproof
Design: Yellow Boots

3. Place: Refers to the point of sale. In every industry, catching the eye
of the consumer and making it easy for her to buy it is the main aim of
a good distribution or 'place' strategy. Retailers pay a premium for the
right location. In fact, the mantra of a successful retail business is
'location, location, location'.

For example:
Location: Open new Timberland outlets, United States and around the
world
Inventory: Reduced inventory, company developed an optical scanner
system that automatically tracks inventory and creates shipping bills

4. Promotion: This refers to all the activities undertaken to make the

product or service known to the user and trade. This can include
advertising, word of mouth, press reports, incentives, commissions
and awards to the trade. It can also include consumer schemes, direct
marketing, contests and prizes.

For example:
Sales Promotion: The company cut their price of is waterproof
Weather buck casual men’s dress shoes from $135 to $99
 However, the marketing mix increasingly includes several other Ps like
people, processes, programs and performance. They are known as modern
marketing management 4 ps.

1. People. Reflects in part internal marketing and the fact that employees
are critical to marketing success. Marketing will only be as good as
the people inside the organization

2. Processes. Reflects all the creativity, discipline, and structure brought

to marketing management. Marketers must avoid ad hoc planning and
decision making and ensure that state-of-the-art marketing ideas and
concepts play an appropriate role in all they do

3. Programs. Reflects all the firm’s consumer-directed activities

4. Performance of the new 4 Ps is looking at how well a product is doing

from a financial and non-financial standpoint. This includes checking
the impact on the business and society that the product has had

3. The overall evaluation of a company’s strengths, weaknesses, opportunities,

and threats are called SWOT analysis.  Conduct a SWOT analysis for this
case.

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a

framework used to evaluate a company's competitive position and to develop
strategic planning. SWOT analysis assesses internal and external factors, as
well as current and future potential.

A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven

look at the strengths and weaknesses of an organization, its initiatives, or an
industry. The organization needs to keep the analysis accurate by avoiding pre-
conceived beliefs or gray areas and instead focusing on real-life contexts.
Companies should use it as a guide and not necessarily as a prescription.

 Strengths: Describe what an organization excels at and what separates it

from the competition: a strong brand, loyal customer base, a strong
balance sheet, unique technology, and so on.
 For example:
 Strong business presence and good brand value: Timberland has a
strong brand name and recognition (There are now more than a
hundred Timberland departments, or “concept shops,” in the
United States and around the world and the company now operates
in more than 45 countries and international business accounts for
40 percent of its sales.)
 Technology: The company developed an optical scanner system
that automatically tracks inventory and creates shipping bills. This
system handles small orders as efficiently as big ones.

 Weaknesses: Stop an organization from performing at its optimum level.

They are areas where the business needs to improve to remain
competitive: a weak brand, higher-than-average turnover, high levels of
debt, an inadequate supply chain, or lack of capital.
For example:
 High price: Timberland’s products are slightly at a higher rate.
This is a weak point for the business as many customers may
prefer to purchase a similar product from other retailers (Casual
men’s dress shoes from $135 - $99)
 Acquisition: The Company was recently merged with VF
Corporation. This will mean that VF Corporation makes changes to
the brand which will be more difficult to increase the brand image
(It is owned by VF Corporation)

 Opportunities: Refer to favorable external factors that could give an

organization a competitive advantage.
For example:
 Monitor the prices: The Company can monitor the prices of raw
material used in the products. This will have a tap on the
production thereby making it more cost efficient. This can reduce
the price of the Timberland’s product, hence making it more
flexible.
 Expand in retail operations to new places: Timberland can enhance
its retail operations to new markets apart from the USA and UK.
This will provide a new opportunity for the business to serve other
countries. (open new Timberland outlets.  There are now more than
a hundred Timberland departments, or “concept shops,” in the
 United States and around the world; small retail “boutiques” were
an increasingly important share of the business)

 Threats: Refer to factors that have the potential to harm an organization.

For example, a drought is a threat to a wheat-producing company, as it
may destroy or reduce the crop yield. Other common threats include
things like rising costs for materials, increasing competition, tight labor
supply and so on.
For example:
 Tough competition: Timberland faces tough competition among
various other brand types. This is a big threat as its competitors are
from established international brands. The company faces tough
competition from both domestic and international brands.
 The brand’s price: Considering the current economic condition, the
company’s prices could be unreachable. This could hit the revenue
generation of the company

4. As a newly appointed marketing manager for Timberland, explain to the

board of directors how can you plan, implement and control the marketing
strategy? In your answer elaborate on the four planning activities as well.

 Planning: 1. Corporate Planning 2. Division Planning 3. Business

Planning 4. Product Planning
 Implementation: 1. Organizing 2. Implementing
 Controlling: 1. Measuring Results 2. Diagnosing Results 3. Taking
corrective action

Strategic Planning Control is a very significant component of the

implementation process, as it involves tracking, monitoring and evaluating
the effectiveness of the strategies that have been implemented, as well as
making any necessary adjustments and improvements when necessary. The
organizational planning takes place at several levels of the organization – the
corporate level, the business level and operational level. The corporate level
consisting of the top management deals with long-term major decisions
making such as allocation of resources, taking major risks for generating
high profits. The operational level decisions are short term and less risky in
nature and lead incremental change in organizational operation.
A strategic plan is of little use to an organization without a means of putting
it into place. In fact, implementation is an essential part of the Strategic
Planning Control process, and organizations that develop strategic plans
must expect to include a process for applying the plan. Strategic Planning
Control occurs in three ways. First, strategic planning is itself a form of
control. Second, strategic plans are converted into reality not only by their
influence on the management control activity but also by the key decisions
regarding allocation of resources. Third, while capital budgeting systems can
respond to requests for resources that are consistent with the accepted
strategic plan, the period between formal, comprehensive strategic planning
exercises can give rise to unanticipated changes in the environment or
unexpected internal crises. Management planning and control as the
processes by which (1) organizational objectives are achieved and (2) the
use of resources is made effective and efficient.

Four planning activities are:

1. Defining the corporate mission

To define its mission, a company should address Peter Drucker’s
classic questions: What is our business? Who is the customer? What is
of value to the customer? What will our business be? What should our
business be?

2. Establishing strategic business units

Large companies normally manage quite different businesses, each
requiring its own strategy. At one time, General Electric classified its
businesses into 49 strategic business units (SBUs).
An SBU has three characteristics:
1. It is a single business, or a collection of related businesses, that
can be planned separately from the rest of the company.
2. It has its own set of competitors.
3. It has a manager responsible for strategic planning and profit
performance, who controls most of the factors affecting profit.
The purpose of identifying the company’s strategic business units is to
develop separate strategies and assign appropriate funding.

3. Assigning resources to each strategic business unit

Once it has defined SBUs, management must decide how to allocate
 corporate resources to each. The GE/McKinsey Matrix classified each
SBU by the extent of its competitive advantage and the attractiveness
of its industry. Management could decide to grow, “harvest” or draw
cash from, or hold on to the business. BCG’s Growth-Share Matrix
used relative market share and annual rate of market growth as criteria
for investment decisions, classifying SBUs as dogs, cash cows,
question marks, and stars. Portfolio-planning models like these have
largely fallen out of favor as oversimplified and subjective. Newer
methods rely on shareholder value analysis and on whether the market
value of a company is greater with an SBU or without it. These value
calculations assess the potential of a business based on growth
opportunities from global expansion, repositioning or retargeting, and
strategic outsourcing.

4. Assessing growth opportunities

Assessing growth opportunities includes planning new businesses,

downsizing, and terminating older businesses. If there is a gap between
future desired sales and projected sales, corporate management will need
to develop or acquire new businesses to fill it. Figure 2.2 illustrates this
strategic-planning gap for a hypothetical manufacturer of blank DVD
discs called Cineview. The lowest curve projects expected sales from the
current business portfolio over the next five years. The highest describes
desired sales over the same period. Evidently, the company wants to
grow much faster than its current businesses will permit. How can it fill
the strategicplanning gap?

The first option is to identify opportunities for growth within current

businesses(intensive opportunities).

The second is to identify opportunities to build or acquire businesses

related tocurrentbusinesses (integrative opportunities).

The third is to identify opportunities to add attractive unrelated

businesses(diversification opportunities)