Running room concepts and applications

¶ … Running Room Case Study

Question 1 Do a SWOT on the Running Room.

The Running Room's strengths include the fact that the Running Room offers personalized service and quality shoes expressly designed for running and for the unique sports needs of runners. Also, the relatively low cost of opening up and maintaining the store means that it is easy to enter the market on a store-by-store basis. The Running Room's weaknesses are that the store has a relatively small niche market, that of serious runners and/or health conscious, older consumers. While serious runners do not generally patronize stores like Foot Locker, more generalized athletic shoe stores such have a wider market base and can sell more varieties of cheaper shoes at volume.

The threats to the Running Room include the store's primary competitors in the form of small independent outlets that exhibit local market strength based on longstanding customer loyalties. Opportunities for the Running Room include redefining the store in the United States to take advantage of the current concern about fitness, the increasingly 'fashion focused' attitude of chains like Foot Locker and The Athlete's Foot in the United States that act as a 'turn off' for serious runners.

Question 2 Present Situation: Considering the geography of the U.S. And criteria for location that Staton seems to prefer, briefly describe three alternative strategies that RR might use to enter that market. Be specific.

Although Stanton has a preference for locating stores in smaller markets, one potential option would be to locate in a larger, more urban area such as New York City and Boston, both cities with large and affluent segment markets that enjoy running and might desire the more personal attention the store provides. Although Canadian expansion was achieved with each new location being paid for out of cash flow generated by existing stores, franchising in the United States remains an as-yet unconsidered option, provided there are strict guidelines regarding the quality and training of the new Running Room's sales staff. Lastly, Stanton could open Running Room stores with different focuses, such as emphasizing the clinic aspect of the store, to encourage customer loyalty and draw new runners to the store.

Question 3: Outline an international business plan for the Running Room to present to possible financial backers. Provide basic information for each component of the plan based on the case presented.

The stores are usually financed from existing Running Rooms, showing the frugality of this store's operating costs. Despite intense competition from much larger companies, because of its low costs of operation and despite its relatively expensive and specialized products, Running Room sales have reached $40 million annually, an average of about $816,000 per store, and the more concentrated United States population would ensure access to more customers, with a higher per capita income than currently exists in Canada.

Each store stocks well-known products such as Nike and Puma, in addition to Fit-Wear, now an established brand name among customers and gives them a reason to shop at the Running Room. The Running Room thus has a reputation for providing good marketing and product placement to its name brand shoes and for known trademarks that draw customers in, and it also has a new brand that can generate customer loyalty and draw customers into the store for the express purpose of buying this product. The fact that the Running Room provides service and quality rather than discounts is another reason that trademarked brands will be willing to do business and finance the expansion of The Running Room.

Question 4: Outline what would be involved in an international marketing strategy for the U.S. market for the Running Room. Use the information provided in the case to show you understand the process. And, based on the strategy, recommend some final decision for Stanton suck as timing, and possible changes to the marketing mix the company presently uses.

The first step in making inroads into the United States would be defining the unique nature of the Running Room's expert sales staff and the quality of information available at its unique clinics as well as during ordinary purchases. This would establish the Running Room's name in a niche market. The assurance of quality advice at all Running Room stores, as opposed to purely locally run stores would also be an added attraction. Running initially free clinics, advertised through local businesses that target stressed-out boomers as well as gyms would be a good way to draw people to the store. Timing the store's opening to coincide with local long-distance marathons and other races would be ideal positioning in a younger, more urban market of serious runners.

To target the coveted baby boomer market of the aging, health conscious consumer, advertising in local gyms, health food stores, and even senior citizen centers and hospitals might be an ideal way to draw these consumers to the store. However, if the store wished to locate in strip malls as well as indoor malls, improving the store's appearance to stand out within the confines of malls or on the sidewalks of cities without lowering the quality of the shoes would be a key element to redefining itself in a new, physical environment. The Running Room does not wish to dilute its brand name, but an ideal way to keep the company's core base of customers yet draw a younger crowd is to show that it offers many quality ways to meet a variety of fitness needs, without entirely sacrificing fashion. If the company made use of American shopping malls, this would be important in terms of attracting younger athletes -- and their parents, and grandparents dedicated to 'walking the malls' in the morning. Entering the venue of suburban malls might be a possible yet unconsidered way of encroaching into the United States for the company, given their greater ubiquity in the United States than in Canada.