Swisher Mower
Short Case Brief #1
Swisher Mower and Machine Company
Major Issue: Swisher Mower and Machine Company must decide whether to maintain its current distribution practices or enter into a private-brand distribution arrangement for the riding mower line.
4 Ps and 3 Cs:
Product: SMC high quality riding mowers
Price: moderate to high
Promotion: Push –TV, radio, newspaper
Place: Push – Regional Distribution through wholesalers and direct dealers
Company: Swisher Mower and Machine Company – small company image
Competition: Competitive – ten manufacturers using varied distribution strategies Alternative 1 – Reject Proposal: Advantages:
- Keep brand identity
- Increase advertising
- Predictability in financial statements
Disadvantages:
Opportunity costs distribution deal may offer
Quantitative:
Alternative 2 – Take Proposal As Is: Advantages:
- Expanded production.
- New market opportunities given location of chain stores (Metro areas)
- Increased sales of parts
- Increased sales of complimentary product – Trail mower
Disadvantages:
- Greater risk for product liability
- Risk of cannibalizing sales in overlapping areas
- Jeopardize brand identity
- Increase of costs: one-time costs, overtime labor, overhead, etc.
Quantitative:
- Increase in manufacturer price: 7.5%
- One-time costs: $10K - $12K
- Projected cannibalized sales: 300 units of Ride King
Alternative 3 – Negotiate Proposal: Advantages:
- Title transfer and payment dates
- SMC product quality offers some bargaining potential
Disadvantages:
Unit Price will probably be fixed
Cosmetic changes not negotiable
Quantitative:
Recommendation: I would recommend Alternative 2 to Larry Brownlow for the following reasons:
- This option would allow Mr. Brownlow to remain on budget, and actually save $6,000
- As a
Swisher Mower and Machine Company
Major Issue: Swisher Mower and Machine Company must decide whether to maintain its current distribution practices or enter into a private-brand distribution arrangement for the riding mower line.
4 Ps and 3 Cs:
Product: SMC high quality riding mowers
Price: moderate to high
Promotion: Push –TV, radio, newspaper
Place: Push – Regional Distribution through wholesalers and direct dealers
Company: Swisher Mower and Machine Company – small company image
Competition: Competitive – ten manufacturers using varied distribution strategies Alternative 1 – Reject Proposal: Advantages:
- Keep brand identity
- Increase advertising
- Predictability in financial statements
Disadvantages:
Opportunity costs distribution deal may offer
Quantitative:
Alternative 2 – Take Proposal As Is: Advantages:
- Expanded production.
- New market opportunities given location of chain stores (Metro areas)
- Increased sales of parts
- Increased sales of complimentary product – Trail mower
Disadvantages:
- Greater risk for product liability
- Risk of cannibalizing sales in overlapping areas
- Jeopardize brand identity
- Increase of costs: one-time costs, overtime labor, overhead, etc.
Quantitative:
- Increase in manufacturer price: 7.5%
- One-time costs: $10K - $12K
- Projected cannibalized sales: 300 units of Ride King
Alternative 3 – Negotiate Proposal: Advantages:
- Title transfer and payment dates
- SMC product quality offers some bargaining potential
Disadvantages:
Unit Price will probably be fixed
Cosmetic changes not negotiable
Quantitative:
Recommendation: I would recommend Alternative 2 to Larry Brownlow for the following reasons:
- This option would allow Mr. Brownlow to remain on budget, and actually save $6,000
- As a