c2 Montana Mountain Biking Hw erry Singleton founded Montana Mountain Biking (MM
ID: 1103107 • Letter: C
Question
c2 Montana Mountain Biking Hw erry Singleton founded Montana Mountain Biking (MMB) 18 years ago. MMB offers one- week guided mountain biking expeditions based in four Montana locations. Most of MMB's new customers hear about the company and its tours from existing customers. Many of MMB's ustomers come back every year for a mountain biking expedition; about 80 percent of the riders on any given expedition are repeat customers. large potential market. He has been reluctant to spend a lot of money on advertising. About outdoor interest and sports magazines, but the ads did not generate enough additional Jerry is happy with this high repeat percentage, but he is worried that MMB is missing a 10 years ago, he spent $80,000 on a print advertising campaign that included ads in several customers to cover the cost of the advertising. Five years ago, a marketing consultant advised Jerry that the ads had not been placed well. The magazines did not reach the serious mountain bike enthusiast, which is MMB's true target market. After all, a casual mountain bike rider would probably not be drawn to a week-long expedition. Another concern of Jerry's is that more than 90 percent of MMB's customers come from neighboring states. Jerry has always thought that MMB was not reaching the sizable market of serious mountain bike enthusiasts in California. He talked to the marketing consultant about buying an address list and sending letters seemed too expensive. The co out a promotional mailing, but producing and mailing the st of renting the list was $0.10 per name, but the printing and mailing were $4 per letter. There were 60,000 addresses on the list, and the consultant told m to expect a conversion rate of between 1 and 3 percent. At best, the mailing would yield 800 new customers and MMB's profit on the one-week expedition was only about $100 per ustomer. It looked like the conversion cost would be about $246,000 (60,000 x $4.10) to obtain a profit of $180,000 (1800x $100). The consultant explained that it was an investment; becauseExplanation / Answer
1. Review the five stages of customer loyalty shown in Figure 4- 4 and prepare a report of about 200 words in which you classify MMB’s customers. Estimate the percentage of MMB customers who fall into each of the five categories. Support your classification with logic and evidence from the case narrative.
According to the five stages of customer loyalty, I believe MMB’s customers lye mostly in the commitment category. If I were to estimate their customer percentage in regards to all the stages, I would assume these percentages:
Awareness: 20%
Exploration: 15%
Familiarity: 15%
Commitment: 65%
Separation: 0%
I estimated MMB’s commitment rate at 65% because the narrative stated that out of their current customers 80% were repeat riders. This also meant the other 20% would have to be in the familiarity group because they were now experiencing MMB, making it more likely for them to try MMB again. However, there current customers cannot fill up all the stages so I decreased the percentage in proportionate to what I assumed the other stages rates were. I came up with 20% as their Awareness rate because with the amount of advertising MMB spent in magazine ads, I would assume many people have seen them to associate their name to Mountain Biking. Also, it was stated that the MMB logo was well-known in the upper Mid-West, thus having more awareness rating. I then left the remaining 15% to Exploration because of the new website traffic as well as email inquiries. Last, I did not enter any Separation rates because it seemed as though many customers who chose MMB were determined to stick with MMB.
2. In a report of about 200 words, recommend an e- mail marketing strategy for MMB. In your recommendation, consider the results of MMB’s earlier print mail advertising campaign, your answer to the first requirement, and the potential offered by permission marketing.
I would suggest combining content and advertising as far as email marketing for MMB. With the popularity of the MMB photos in mind, I think it would be best to include them in a newsletter. This way, MMB not only shares photos and experiences that interest the recipient, but also allows the recipient to associate them to MMB. Below the newsletter, MMB should provide a mountain biking tour registration link as well as a link to the website. Creating this newsletter with the links would allow more traffic for potential customers.
If MMB were to stick with their print advertising, they would spend more printing the ads then they would in gaining profit from those ads. With email marketing, there would be no cost in printing because everything is done online. This would save advertising cost as well as provide a low-risk of lost in terms of return revenue. However, if MMB opted for just permission marketing where only recipients who were already interested asked for emails, MMB’s efforts to expand their market would be limited. Using the email marketing strategy I suggested would bring in potential customers of a wider interest such as the photos not just mountain biking tours.
4. Prepare a report of about 500 words in which you outline an affiliate marketing strategy for MMB. Include a description of the types of Web sites that MMB should attempt to recruit as affiliates, and present at least five examples of specific sites that would be good referral sources.
MMB Affiliate Marketing Strategy
An affiliate is a web site, which promotes another company’s product(s) in order to get click-through sale revenue. Since MMB mainly sells one product, which is Mountain Biking Expeditions, MMB could serve as an affiliate site to related products. Products which relate to MMB would be Mountain Bike Gear, Apparel, and Accessories.
The best way to set up an affiliate is to join their program then add the linked product images to MMB’s website. MMB should also provide products with good reviews in order to have higher click-through sales. I would also suggest having monthly MMB product picks that can be added to an MMB newsletter. This way, MMB can market directly to interested customers as well as the usual website traffic.
Five affiliates I would suggest are REI, Sports Authority, Dick’s Sporting Goods, JensonUSA and Great Outdoors. All of these companies sell related products and most of them also promote outdoor activities where there products can be used. This is beneficial for MMB because not only can MMB gain revenue from affiliate sales, but also create a partnered advertising format.
From all the affiliate suggestions, I highly recommend that MMB affiliate with REI or Great Outdoors. REI is a popular outdoor products chain and I believe associating with such a well-known company would help boost MMB’s popularity as well. Plus, REI has a large inventory of cycling products, which would allow more options for customers.
Although the Great Outdoors is neither as popular nor have as large an inventory as REI, they do have the benefit of promoting MMB towards their viewers. Great Outdoors not only sells Outdoor Gear, but they are also an Outdoor Resources and News Website. They link information such as tour events, pictures of tours, and tips when taking a bike tour. MMB associating with Great Outdoors would help establish them on their website and perhaps link future tour photos and news to MMB.
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