UNIVERSITY OF NEW YORK IN PRAGUE
European Business Administration
AN MARKET RESEARCH AND COMPETITOR’S ANALYSIS OF MADSHUS IN NORWAY FOR THE PURPOSE OF CREATING AN APPROVED MARKETING STRATEGY
2017 THU TRANG DUONG
UNIVERSITY OF NEW YORK IN PRAGUE
European Business Administration
AN MARKET RESEARCH AND COMPETITOR’S ANALYSIS OF MADSHUS IN NORWAY FOR THE PURPOSE OF CREATING AN APPROVED MARKETING STRATEGY
By
THU TRANG DUONG
2017 Mentor: William Pattison
Statutory Declaration / Čestné prohlášení
I, Thu Trang Duong, declare that the paper entitled:
AN MARKET RESEARCH AND COMPETITOR’S ANALYSIS OF MADSHUS IN
NORWAY FOR THE PURPOSE OF CREATING AN APPROVED MARKETING
STRATEGY was written by myself independently, using the sources and information listed in the list of references. I am aware that my work will be published in accordance with § 47b of Act
No. 111/1998 Coll., On Higher Education Institutions, as amended, and in accordance with the valid publication guidelines for university graduate theses.
Prohlašuji, že jsem tuto práci vypracoval/a samostatně s použitím uvedené literatury a zdrojů informací. Jsem vědom/a, že moje práce bude zveřejněna v souladu s § 47b zákona
č. 111/1998 Sb., o vysokých školách ve znění pozdějších předpisů, a v souladu s platnou
Směrnicí o zveřejňování vysokoškolských závěrečných prací.
In Prague, 11/12/2017 Thu Trang Duong
Acknowledgement
I would like to thank my parents who really support my studying process and provide the best advice. A very special thank the Student exchange program at UNYP where it not only brought me the exciting study abroad semester but also the great opportunity which
I have met my fiancé, Linus, who has always been by my side since then and encouraged me into this topic. He is the most generous man and the biggest supporter helping me reach the goals and achieve the best success. I'm truly proud, honour and grateful having him in my life.
Especially thank Mr. Pattison who was very kind and helpful throughout this thesis for my Bachelor degree. I really appreciate his knowledge in marketing, the abilities to solve problems in such intelligent way and his impressive personal experiences. Also, I would like to thank all UNYP professors that I had with during my three years of academic study. They are truly the most successful, passionate and inspiring people I know.
Finally, I would like to thank all people who participated in my personal interview, survey and observation. They provided a lot of valuable comments and greatly contributed to the better outcome for my thesis. I really appreciate their efforts which motivate me moving forward and not giving up.
Abstract
The aim of this paper is focusing on investigating the current marketing strategy of
Madshus AS, the cross-country skiing brand comparing to its successful competitors:
Fischer and Salomon. Based on the research, I created the SWOT analysis and provided the new improvement marketing strategy for Madshus. I have analyzed the market for cross-country skiing in general, then the company's marketing campaigns, as well as making surveys for people in two groups of different ages, perspectives, and backgrounds. I also had a direct interview with the International sales manager of
Madshus, Mrs. Tone Sunde for the depth understanding of the company’s culture, strategy and mind-sets. Additionally, there are observations of the actual in-store experiences and data from the sales team member in the three biggest retailers located in
Oslo, Norway. Finally, I collected all the data and surveys' results in order to create the new integrated strategy for Madshus.
Table of Contents
I. Introduction……………………………………………………………………………1 1.1. Cross-country skiing - History and General Information…………………...1 1.2. Best destination and brands for cross-country skiing……………………….2 1.3. Current Problem…………………………………………………………...... 2 II. Madshus as a company…………………………………………………………….….4 2.1. History and General Information…………………………………………....4 2.2. Brand Story………………………………………………………...…….….5 2.3. Segmentation and Targeting……………………………………………..….8 2.4. Positioning and Differentiation………………………………………..…….9 2.5. Financial Status…………………………………………………...………..10 III. Fischer and Salomon as companies…………………………………………………12 3.1. Fischer………………………………………………………………..…….13 3.1.1. History and General Information…………………………………………13 3.1.2. Brand Story………………………………………………………………13 3.1.3. Financial Status…………………………………………………. ………14 3.2. Salomon……………………………………………………………………15 3.2.1. History and General Information…………………………………………15 3.2.2. Brand Story……………………………………………………...……….16 3.2.3. Financial Status…………………………………………………………..17 IV. SWOT Analysis………………………………………………………….…………18 4.1. Madshus's SWOT Analysis………………………………………...………18 4.2. Strengths and Weaknesses of Fischer and Salomon……………….………19 V. Madshus's current Marketing Strategy………………………………………………21 5.1. General Marketing…………………………………………………………21 5.2. Madshus's Marketing/Advertising campaigns………………………….….26 VI. Fischer's and Salomon's current Marketing (Promotion) Strategy…………………32 VII. Market Research Methods and Analysis……………………………….………….34 7.1. Observation…………………………………………………….…………..34 7.2. Survey………………………………………………………….…………..34 VIII. The New Integrated Marketing Strategy…………………………….……………35 8.1. The Multifunctional Jacket…………………………………………………46 8.2. The Packaging………………………………………………..…………….47 8.3. Celebrities Endorsement…………………………………….……………..48 IX. Conclusion………………………………………………….………………………49 X. Comments………………………………………………….………………………..51 XI. Appendices……………………………………………….….……………………..52 11.1. Appendix I…………………………………………………….………….52 11.2. Appendix II……………………………………………………………….59 11.3. Appendix III………………………………………………………………61 XII. Bibliography…………………………………………………………...…………..64 11.1. Work Cited……………………………………………………..…………64 11.2. Bibliography……………………………………………………...………65 11.3. Annotations for Charts and Photos……………………………….………70
I. Introduction
1.1. Cross country skiing - History and General Information
The oldest type of skiing is cross-country skiing. It had been existing for centuries and officially developed into a sport in the late 19th century. For a long period of time,
Norway only had small isolated communities with a huge amount of snow during the winter time. It was really challenging for people to get from one town to another. Then cross country skiing was created in order to let people keep their social connections with their family and friends from other towns. The word ski is a Norwegian came from the old Norse word "skid" which means a split length wood.
The first type of competition was in the Norwegian army in the 18th century where its first race was held in 1842. Then, people created more events and made it into a festival in 1892. The first cross-country ski race at the Winter Olympics was in 1924 and the first women were debuted in Oslo 1952. Generally, this sport has been dominated by the
Nordic countries, however, it is mostly in Norway.
Cross-country skiing can be performed anywhere with thick snow from the ground. It is used to get from one location to another and considered as one of the greatest ways to exercise since the activity is similar to running except it is on snow instead. Downhill skiing, or normal skiing, however, can only be done if the mountains have lifts in order to help people get up to the top. This means normal skiing can’t be done anywhere but down in special skiing resorts locations. Cross-country skis are slim and light, while normal skiing equipment is bigger and thicker. The cross-country boots only strap to the toe of the ski, while on normal skis they are a bit bigger, has more plastic on and completely strapped front and back.
1
1.2. Best destination and brands for cross-country skiing
There are many great destinations for cross-country skiing in the Nordic area which the most known are: Hemsedal and Trysil. These resorts are both located three hours away from Oslo, near the border of Sweden. However, they are for downhill skiing only. The
Norwegian town called Sjusjoen is considered to have the best trail in the world for cross- country skiing. It is located beside the bigger town called Lillehammer where the 1994
Winter Olympics was being held. There is over 300 km of well-maintained skiing trails and the snow conditions are usually at its peak. Located only 2 hours away from the capital Oslo, Sjusjoen is truly a heaven for any cross-country skier.
The most popular and successful brands in cross country skiing sport are Madshus,
Fischer, and Salomon, where Madshus is the first and oldest ski manufacturer. Madshus currently sells their products in 17 different countries which with the biggest markets are the Scandinavian countries, Austria, Germany, Italy, France and North America. They tend to focus more on the countries that have bigger interests in cross country skiing. All of those three brands have a lot of product lines for many using purposes with the price range from low to high, and suitable for all ages people with different experiences levels.
While Madshus only focusing solely on cross-country skiing, Fischer and Salomon have a wider selection of products in all type of winter sports such as downhill skiing and winter apparels. Fischer also sells hockey sticks and gear. For this reason, Salomon and
Fischer have bigger target audiences than Madshus. It is also explained why they sell their products in more countries comparing to Madshus.
1.3. Current Problem
According to the data collected from the Norwegian statistical office in 2016, Norwegian people are exercise more than before. The study showed that 83% of Norwegians over
2 the age of 16 exercise at least once per week and only 5% never exercise at all. This is a huge change from 2007 when the result was only 73% for who exercise once a week and in 2001 it was only 66%. This major increase is affected by the elder in the community who are getting more active in exercise compared to before.
The type of exercises is variable and there is a huge changed among them for the past years. In 2001, the most common exercise was biking, second place is cross-country skiing, jogging is in third place and last goes for strength training. This has completely changed around 2016 where cross-country skiing is now the least practiced exercise out of the four with biking as the third least. The amount of people lifting weights has skyrocketed to the number one common exercise and jogging as a second.
The main explanation for this changing is the status of the weather. In the last couple of years, Norway has been having terrible winters with not enough of snow. Weight training, jogging and other outdoor activities have gained a lot as it is a new trend to be in shape and healthy. Another factor is they take less time and effort comparing to cross-country skiing, therefore, people could repeat their training easier each day.
Based on the changes in the market, Madshus is now having to face many problems. They are not only having to be strong enough to compete with their other successful brands
Fischer and Salomon, in which those brands have way more options than just cross- country skiing but also, Madshus has to face with another huge problem of the changing environment. Global warming has made the winter season becomes shorter and this has caused people losing their interests in winter sports like cross-country skiing.
3 II. Madshus as a company
2.1. History and General Information
Madshus was founded by Martin Madshus in his father's barn in Vardal, Norway back in
1906. Since Martin started his business, he has always been careful and had a keen eye for selecting the best woods for his skis and all of his tools he used was handmade by himself. He had an obsession with only creating the best and never sell anything that he didn't see as pure perfection. His legacy has carried on over the years as once Madshus started making skis out of the best steel with their famous M brand emblazoned on.
Madshus won its first Olympic medal in 1928 when no other ski manufacturer back then has ever won any. This lead to a huge increase in demand and the company had to relocate to expand their production. In 1972 Madshus moved their factory to Biri which located
20 km away from the South of Lillehammer town. They have been in this factory ever since then, and the factory has been expanding and growing into the state of today. All of
Madshus' products are still being produced in that one and only factory in Norway in order to make sure the quality is at its highest (with the exception of one model is being made in China). Since then the company keeps innovating their technique in order to maintain the position of being a leader in the market.
In 1988, Madshus was bought up by K2 which is a ski company focuses mainly on downhill skis and wanted to expand into the cross country ski industry. Instead of making their own skis, they bought Madshus instead. K2 is based out in American on Vashon
Island, Washington State's Puget Sound and was born in 1962. By the year 1995, Madshus continued to grow and develop better, and now being sold in 17 different countries. In the year 2010 Madshus revolutionized the market by becoming the first to produce ski boots made without any PVC and instead switching to a softshell construction to achieve the
4 best comfort for the skier, but also to reduce the environmental footprint caused by producing PVC.
In 2017, Madshus is still being considered as one of the best brands in the world for cross- country skiing. The women's world cups were mostly dominated by Madshus' skis and boots, where Heidi Weng finished the season in first place, Krista Pärmäkoski in second place and Ingvild Flugstad Östberg in third place.
2.2. Brand Story
"A brand story is a cohesive narrative that encompasses the facts and feelings
that are created by your brand/business. Unlike traditional advertising, which is
about showing and telling about your brand, a story must inspire an emotional
reaction." (Hope, 2015)
There are many things could impact the influence of the brand such as history, experiences, values, customers' perspective, and so on. However, the brand story should be authentic, unique for its own values, and clearly, clarify enough the differences between the others. A lot of cases happen when customers decided to go for one brand instead of its competitors because they are more attracted to the story and having positive or familiar feelings with it.
Having a brand story is truly important thanked many benefits it brings to the company.
It establishes, develops and maintains the brand awareness/recognition. Many studies have stated that customers tend to go for the firm which they familiar with than the stranger ones. The more recognizable the brand is, the quicker and easier people will feel more likely to purchase the company's services or products. The brand story also makes you unique and different from your competitors. Nowadays, globalization makes it way
5 harder for companies to differ and stand out to others. The competing stage is no longer local but in the global economy instead.
Internally, having a brand story is truly important for the firm since it clarifies the organization's goals as well as individuals'. Employees will be able to achieve the best performances based on the in-depth knowledge of the brand. By having a strong idea and belief in the brand, the employees can deliver the right message and influences the customer feelings in order to establish, maintain and develop the relationship with them; as well as keeping the loyal customers consuming the brand's products or services. A strong film with a great brand story will create customers’ certain expectation level whenever they experience the provided services, also connect with their emotions in a positive way to motivate them to keep going back and even willing to pay premium prices at all time. Finally, a brand story will help the firm stay focused and create its own value.
Because at the end of the day, the brand value is worth more than any physical assets it owns, and by staying focus, a film can have a proper business strategy and effective marketing plan.
Madshus's brand story is "The Norwegian Spirit", which the aim is to remind people of the victory history with many successes that Madshus has been having for over years. By using their products and services, the customer will feel the Norwegian pride and honor by having the similar experiences that many other Olympic athletics has been succeeded with many metals. The victory and honor of success will boost their self-confident, which is the main key to success in life, and happy emotions in order to motivate them being the fastest in the race which is the main key to success in cross-country skiing and also enjoy the feeling of skiing within the family and friends time and having the best and valuable moment together.
6 "A slogan is not just a tag-line that advertisers create; they play a strategic game;
in the long run, good slogans play with customer's mind making it believe yours
is a reliable product." (Hemani, 2012)
Madshus's slogan is: "The cross-country company since 1906" when the company starts developed and they have never changed it since then. The aim of this slogan is to leave the strong impression on the history of the brand in their customers. They want their customer having the brand awareness as prestige with the long history of producing such great products from the finest materials. The positive spirits that help many athletics succeed in the Olympic seasons are also attached to this slogan. It is such a strong statement for people to recall and remember the great story of the brand as well as a great way to establish the relationship with customers. It also defines the unique and difference of Madshus with the competitors. Madshus's slogan is simple, clear, trustable, related to the brand story and raise the positive emotion in customer.
"Color psychology is an area of research that looks at how color influences our
behavior and decision-making. When used in marketing, for example, different
colors can impact the way buyers perceive a brand in ways that aren't always
apparent, such as how certain hues can increase appetite." (Kolowich, 2017)
There are many scientific proofs and studies have stated that colors have such important impact in human psychology and this is one of the great factors should be used and applied in marketing for the greater business strategy. That is one of the main reason why a company chooses its own color for its brand, logo and even slogan. For instant,
Madshus's logo is the two red skis combines together and made it an M looks, which is the initial for Madshus. The main color of Madshus is red mix with a tiny bit of white and black. The red color represents the ultimate power, the passion, the energy as well as
7 excitement. This is a great relationship with its brand story which is the Norwegian spirit.
Madshus wants their color will leave a great impact to boost the ultimate positive energy and emotion in the consumers. The little mix of white color which reminds people of snow is relevant since all the product is for outdoor activities in the snow. Then finally the black color represents for elegant, classic and prestige. This truly well applies to the brand itself since they want to be seen as a classic and prestige brand for over years of history.
2.3. Segmentation and Targeting
The main object of segmentation is to be able to divide the market into different groups.
What will people potentially buy our products? It is important to look at your current customers demographic because those are the people will most likely to buy your future products. Nowadays, the firm is more tend to establish, developing and increasing the loyal customers and keeping them coming back for the further products or services. By dividing the market into certain groups, it will be easier for the firm to focus on the right target and advertising for these groups instead. Having the right focus will help the firm being more effective in business strategy and it will also be easier for the employees to get the best performances and reach their individuals' goals.
According to the International Sales Manager of Madshus, Mrs. Tune Sunde, since the market for cross-country skiing is quite small, the main target will be people in all ages who interested in cross-country skiing, either taking the sport as a hobby or serious as training focuses and competing. This is not only applying for Madshus company but also its competitors. Potentials customer will be divided into two main group: non-athletics and athletics. Madshus customers are children (0-12 years old), young people (13-30 years old), middle-aged people (30-45 years old) and also older people (over 45 years
8 old). Based on the gender, their targets are unisex, men, women, boys, and girls.
Geographic wise, Madshus mainly focuses on the Scandinavian countries because that is where the most cross-country skier is from and these countries have a lot of people taking part in winter sports in general. In the past couple of years, Madshus has been expanded their geography segmentation to the United States and other countries in Europe.
2.4. Positioning and Differentiation
A clear positioning is very important for a firm which wanted to be successful in the market or the industry. For the instant, if the products should be positioned as cheap or expensive, low or high quality and whether or not it will be unique enough to compete with others products from different brands. There are multiple different ways for companies to position and differentiate themselves. If a company does not have a clear position, the customers will not be able to know what to expect from it. Also, if companies are not able to differentiate themselves from competitors, the customers will end up having no reason to choose their products instead of millions others competitors.
Madshus is focusing a lot on their customer services and products satisfactory in order to establish the relationship with new customers and maintain the current loyal customers.
Madshus is considered slightly as a luxury brand in the cross-country market. They want customers to see them as a prestige brand with the history of over 100 years.
The difference between Madshus comparing to its competitors Fischer and Salomon beside the unique colors is Madshus is one of the very few companies that still produce all of their skis equipment in the original country, while most competitors have all moved their factories to China or other Asian countries to lower the cost. Since 1906 Madshus have taken pride in only focusing on what they know best, which is “cross-country”. Their competitors have a wider selection of products, however, this actually makes it harder for
9 them to dedicate themselves into specializing in cross country in the same way as
Madshus does.
2.5. Madshus's Financial Status
“One of the difficulties in strategic market management is developing
performance indicators that convincingly represent long-term prospects. The
temptation is to focus on short-term profitability measures and to reduce
investment in new products and brand images that have long-term payoffs.”
(Ross, Westerfield and Jordan, 2008)
A lot of time it can be hard for a firm to see the bigger pictures of things. It is easy to look at the current profit and decide to celebrate by taking out the money as a “bonus” and achieve the good profitable quarter. For the instant, presume in this case the bonus was one million dollars, the money would have been put back into the company for investment. By doing so this it will help the company expand more and possibly invest in new products and the brand's image. As there is a saying that you need to spend more money in order to get more back in return. This will lead to the next quarter of there will be three million dollars as profit instead of the one million dollars earlier. Therefore, by keep investing for the long-term gain, the company will be able to grow and expand more this leads to higher profits and revenues.
The concept of a net present value is a representation of a long-term profit stream, but it not necessarily operational. It is important to research and analyze the company's current situation and think, for instant what type of strategy will lead to the highest profits as possible in the next 5 to 10 years, not what will make the company profitable only for this certain year, which could potentially lead to the lost of money in the following one. It is important to look at the company's key assets and competencies to be able to long-term
10 plan the strategy. It is also important to look at what are the core strategic dimensions to make the company more competitive with respect to products, new develop products and the increase in productivity.
According to Ross, Westerfield and Jordan, there are six important points to look at to determine the long-term strategy:
- Customer Satisfaction/Brand Loyalty
- Product/Service Quality
- Brand/Firm Associations
- Relative Cost
- New Product Activity
- Manager/Employee Capability and Performance
All of these points need to be taken into consideration in order to be able to really evaluate the company's current performance. When the company knows their exact current performances, they will be based on these six areas and create the improved strategy for the ultimate profits in the long-term run.
Madshus needs to take these six steps into careful consideration to be able to plan out a strategy for their future. As the whole winter sports market has been in a steady decline in the last five years, at the moment it is more important than ever to make some changes within the company's strategy and financial planning in order to make sure the company is able to survive in this declining market. It is also important to take into consideration that this decline might be permanent and not temporary. When a market is low the best
11 thing to do is not to try to make a profit in the coming years because that will just lead to bankruptcy. Instead, Madshus needs to look at their 10-year plan and see how will they be able to show a good profit by the year 2027. If going over these six-step and setting up the right long-term plan is executed Madshus will start being more profitable in the future.
There is very little known information about Madshus financial record open to the public because the company is private and not public. This also mentioned by the International
Sales Manager, Mrs. Tone Sunde: "Our exact data about the financial statement is internal, however, I can tell you that have stable income during the most recent years, even though the demands and market trends are slighting changing each year". D&B
Hoovers, the only one source that I could find stated that Madshus had a revenue of 25 million dollars, however, they have the net income of -75 thousand dollars. due to the high expenses. This is not a huge loss since the market is suffering at the moment.
However, the loss may be worse and strongly affect the company in the long-term run if the demand is keeping decreasing and Madshus do not improve their strategy. Gratefully, even the numbers are looking negatively for the past recent years, Madshus is still doing a lot better than its competitors Salomon and Fischer. Based on the size of the company, this is a huge loss for Madshus. Mainly because it is a small film and as we can see because they only had a revenue of 25 million dollars. For a small company, it can be a lot more dangerous to lose money, because they have less equity and cash to back up the loss.
III. Fischer and Salomon as companies
"Analyzing a competitor's objectives provides important insights into whether the
competitor is satisfied with its current profitability and market position and thus
12 how likely it is to retain its present strategy. Objectives include financial goals,
competitive position (Market share), and such qualitative objectives as industry
leadership in price, product technology, and social responsibility." (Entrepreneur,
2006)
3.1. Fischer
3.1.1. History and General Information
Fischer founded by Josef Fischer in 1924 in Ried Im Innkreis, which located just by the
North East of Salzburg, Austria. He started his company by making wooden wagons and on his spare time, he produced some skis. Later by the year 1938, the company had switched over to focusing mainly on manufacturing skis which were with 30 employees.
Then the company sold over 2000 pairs of skis within the United States and even more in Europe. Following the World War II, the company was put on hiatus and reemerge in
1949, and by this time the factory and number had expanded and by 1958 they were able to manufacture of 50,000 pairs of skis annually. Nine years later which was in 1967, they had over 700 employees and produced over 330,00 pair of skis annually. During the 70-
90s Fischer was partially owned by different other companies and wealthy individuals, however, in 2002 Fischer was brought back by the original Fischer family and has since then been a 100% family-owned company. Fischer is quite unique by being one of the few and the only one of these three companies that are 100% owned by one family. Their main colors are yellow and dark and they manufacturing Nordic skiing, Alpine skiing, and hockey equipment.
3.1.2. Brand Story
The Brand Story of Fischer is "The Perfect Skiing Experience"
13 No slogan needed, the company wants their customers to feel the perfect skiing experience is in just only one word: "Fischer". The brand is for "cool" and young dynamic people who want to explore the best adventure and having their own wonderful stories.
Fischer wanted to deliver the message to their audiences that the best performances are shown by no words, but the fastest and coolest movements that Fischer will be the perfect partner will help you achieve. This is very important in the cross-country skiing sports since it requires you to have great movement skills and the faster you are, the easier you get to the finish line and being a winner of the race. Fischer has the logo of the big yellow triangle and on top of that in the perfect middle is the smaller pure black upside-down another triangle which creates the three separate triangles in just one logo. The yellow color represents the creativity, optimism, and happiness while the black color represents for the classy, substance and elegance. The logo and the brand colors are very well-related to the brand story and represent perfectly the message that Fischer wants to deliver and influence the others.
3.1.3. Financial Status
Fischer has not been doing so great these last few years and by the statistics data on their company website, we can see that they are suffering from the changing of the market.
They have lost about 10 million Euros every year for the past 5 years until now. In order to survive, prevent the loss and have better improvement, some drastic changes in their strategy needs to be made. In 2012, they had a total Equity of 173.5 Million Euros. It went up to 186 million in 2013, then in 2014, the number went down to 159 Million. The last year of 2015/2016 it continuing decreases to 145 million Euros. The overall marketing of especially winter sports has been suffering these last years, but Fischer is suffering more than most companies by this financial status. As Fischer is a 100% family owned company it is hard to know if these last years has been prepared for and the cause
14 of losing money has hopefully been put into investments to improve the future long-term profits for the company. If the loss of profit has been because of other reasons the future is not looking bright for Fischer.
Fischer is also a privately held company so there is no information known about their liquidity. However, we know that they have had 5 years in a row without turning a profit, which looks really poor, but because they are a privately held company, we can not be sure where their money is going to. They might be investing all their equity into expanding their business which would make this minus in profit just temporary and will increase the value of the company in the long run. Or potentially these last few years are the result of poor products, perhaps bad marketing and sales, or simply just a declining market with not enough customers. There are endless possibilities of things that could have affected this.
“Short-term financial decisions typically involve cash inflows and outflows that
occur within a year or less. In contrast, long-term financial decisions are involved
when a firm purchases a special machine that will reduce operating costs over,
say, the next five years.” (Ross, Westerfield and Jordan, 2008)
This is an example of what Fischer might potentially be doing, by spending a lot of money to increase their product value in the long run in the next 10 years this could improve the company's revenue and profit a lot.
3.2. Salomon
3.2.1. History and General Information
Salomon founded in 1947 their workshop was located in downtown Annecy France.
Today they manufacturing mountain sports equipment such as skiing, cross-country
15 skiing, snowboarding and many other outdoor activities, but in 1947 they only made skis and skis-related types of equipment. In 1957, Salomon invited a new type of revolutionary ski bindings called “le lift” which replaced the old traditional leather binding straps.
Salomon has always been strong innovated wise and during the years their strongest attribute has always been inventing revolutionary new things to improve skis. By 1966, they invited the first binding with a self-release headpiece which all skis still have today.
It was introduced to the world during the 1966 Winter Olympics. The self-release headpiece makes the skis fly off in case of a crash. This is really good because it makes the chance of getting injured a lot lower than before. That is why still today we have self- release headpieces on all skis in the world. By 1972, Salomon was the number one binding manufacturer in the world selling over a million pairs in a year. By the year 2001,
Salomon expands their product lines into summer equipment, clothes, and hiking boots.
3.2.2. Brand Story
The brand story of Salomon is: "Ultimate Play Time". Salomon believes that their products are just not simply an object, but the best time that everyone been dreaming of and wish to get. They believe that life is full of joy and happiness with full of great opportunities. They don't want their customer to wait for any longer doing nothing and wasting their value opportunities for the greatest experience. By using Salomon products, the customer will instantly get the best enjoy feeling for themselves, around their families’ members or with friends, in such memorable and meaningful adventures. Salomon is also a perfect option for those who want to not challenge themselves in the great new outdoor activities, but also ultimately taking their opportunities to make connections and share their amazing stories, experiences to others.
16 Salomon slogan is "Time to play". It is short, simple, easy to remember and moreover pushing the needs and the wants of customers to go out and "play". They understand that people of all ages love to play and that happened since they were born as a little baby. It is the excitement that we have been seeking and doing in our nature blood. Salomon's main color is the light neon blue which represents the dependability, trust, and loyalty.
Their logo is the white square with the black thick S initial in the perfect middle. These colors represent not just classy but also plain and simple. They have all related the brand story and also help in communicating the brand greatly.
3.2.3. Financial Status
There is also no specific data for Salomon financial statement because they are owned by a Finnish company called Amer. Amers' financial statement is the combination of all its brands which included Salomon. Based on the sales record data in their outdoor product lines, it is shown that they are doing very well. Their net sales and profits are high as well as the steady increase from the year 2012 to 2016. It is hard to speculate exactly how well
Salomon is doing as a company but seeing as they are one of the biggest smaller companies owned by Amer Sport we can assume they are doing fairly well. The reason for this is that because Amer Sports is so big they have the resources to market the brands they want to focus on. In simple terms, Salomon has a way bigger budget than for example
Madshus which leads to them being able to target more customers and also produce products at a cheaper price. There are a lot of benefit by being owned by a big company, the only thing that is negative is that it is easy to lose the same real handmade quality that a smaller company like Madshus can offer to their customers.
17 IV. SWOT Analysis
"Strategy formulation is often referred to as strategic planning or long-range
planning and is concerned with developing a corporation's mission, objectives,
strategies, and policies. It begins with situation analysis: the process of finding
strategic fit between external opportunities and internal strengths while working
around external threats and internal weaknesses" (Hunger and Wheelen, 2017)
SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats, is one of the most used tools for analyzing the company's current situation in order to create the proper and better fit business strategy. It does not only identify the firm's internal competencies but also help to find out the opportunities for the firm to change or grow due to the lack of current's resources. The helpful objectives to observe and archive are strengths and opportunities while the harmful ones are weaknesses and threats.
4.1. Madshus's SWOT analysis
Strengths
- The oldest and prestige cross-country manufacturer in the world
- Strong team members with the winning history of Olympics
- Strong brand awareness and positioning in Norwegian market
- Innovated products have proven to work for many years.
Weaknesses
- Narrow market shares and customers
- Narrow product lines
18 - Lack of packaging and promotion
- Lack of information on the company website and the online store
Opportunities
- Expanding product lines for outdoor activities besides cross-country-skiing
- Improve the product's packaging and promotion strategy
- Improve the brand recognition and its image
Threats
- Decreasing of demands and market shares
- Global warming effect the weather for outdoor activities
- Strong brand awareness of competitors internationally
4.2. Strengths and Weaknesses of Fischer and Salomon
"The purpose of the competitive analysis is to determine the strengths and
weaknesses of the competitors within your market, strategies that will provide you
with a distinct advantage, the barriers that can be developed in order to prevent
competition from entering your market, and any weaknesses that can be exploited
within the product development cycle." (Entrepreneur, 2006)
Fischer
Strengths
- Great brand awareness and image
19 - Wise selection of products and product lines
- More spending to increase their brand awareness and market their products
Weaknesses
- The loss of profits keeps decreasing for the past recent years
- Investors and stakeholders are not satisfied
- Only have products in a declining market
Salomon
Strengths
- Large brand with the awareness around the world
- Huge number of sales force focusing on marketing and sales activities
- A huge parents company, that also own multiple winter sports companies so easier to market their product and adapt to market
Weaknesses
- Lack of product diversifications
- The newer product has barely differences with the old ones
- Not seen as high-quality products
Both Fischer and Salomon companies are more recognizable and have a bigger brand awareness internationally. They also they have a much bigger product lines in many different types of winter sports comparing to Madshus. However, for consumers who
20 have such strong interests in cross-country skiing, which is Madshus' main target audiences, Madshus is surely more well known compared to Salomon and Fischer by lots.
Madshus might not have as many different variations of products as its competitors, however, this is not necessarily an awful thing. The reason for this is it gives them a 100% focus on the products they have and improve them better. When a large company tries to produce many variations of products in different areas, it is not easy to remain the quality of all those products and the company tend to focus more on its best sellers (in this case that would be Fischer's and Salomons downhill skis). This gives Madshus an advantage because they only focus on cross-country skis while its competitors make cross-country skis as an extra extension and not truly their main products.
V. Madshus's current Marketing Strategy
5.1. General Marketing
According to Philip Kotler and Gary Armstrong in the Principles of Marketing book, there are 7P's of marketing which stands for Product, Price, Place, Promotion, People,
Process and Physical environment or Ambiance. These 7 factors are used while creating the proper strategy for the target customers and making sure they are all satisfied with the services and it meets the customers' current and future needs, wants and desires. They are not only helping to improve the company in general business, but also attracted new customers, establish more loyal customers which are the potential ones, and maintaining the strong relationship with the existing customers.
Products
The product is defined as "anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need" (Kotler and
21 Armstrong, 2016). This means it does not only include physical objectives but also services, ideas, events, experiences and so on.
Madshus has a narrow line of products as they aim to only focus on what they know best: cross-country skiing. There are four product lines with the total of 47 products at the moment: skis, boots, poles, and accessories. The product does not come with any packaging but sometimes a plastic wrap around for the physical protection. A lot of their products does not even come with plastic wrapping or any type of box. However, all of the products are linked to cross-country skiing with the high-quality form the finest materials. This is what Madshus takes pride in until now and they still not yet looking into expanding their product lines. They have been on the market for about 110 years and hopefully, they could go for another 110 years with the same concept. We could also see this is a missing point in packaging since the package does the matter when it comes to communicate and direct personal interaction with customers. Moreover, Madshus want to leave such a good impression as a prestige brand in customers, they could have done this way better than the current situation.
Price
Price is the amount of money that the company decides to charge its customers for the products or services. The price will be based on the research in market, citizens’ income as well as the wants, needs and desires of consumers. The price range in Madshus is from
2000 NOK to 8000 NOK depends on the product line they are selling. 2000 NOK is the very basic ski equipment for beginners while the 8000 ones are for the professional and athletics. They take prestige in their brand and it shows well in their logo “The cross- country company since 1906” advertising that they have a loyal Norwegian company for over a hundred years. For the low to medium product ranges, they have very similar price
22 with their competitors Fischer and Salomon. However, their highest product line has also the highest price in the Norwegian market. We call this premium price as Madshus truly believe that product line is unique and way better comparing to any other type of ski equipment currently being sold, based on the finest material and the newest technologies specially made by Madshus.
Place
The place is the location where Madshus sells their products for the interaction, communication and approaching customers. Madshus mainly focus on the Scandinavian countries like Norway and Sweden since those countries have the highest interested in cross-country skiing. For the past years, they have extended their brand and products to the United States, Canada and other countries around Europe as well as Asia such as
China.
Madshus does not own any physical stores or boutiques, instead, they manufacturing and distributing all their product to all the sports retailers where XXL, G-sports, and
Intersports are the biggest. Their business model is the manufacturer. They do own their official online store where the customer can order and get direct the products directly from them. It is only available in some certain countries in Europe, China, United States and Scandinavia countries.
People
People are very important for the company in general and for marketing strategy in particular. They are the representatives of the brand, show the brand story and the spirits attached to it. People play such important role because they directly communicate the
23 brand to the audiences, influence them in their own unique way and help the film reach the overall goals and performances.
Madshus has a huge team of athletes with over 40 people in all of the three biggest cross country events. The category is divided into four groups: Biathlon, Cross-country, Nordic combined and Ambassadors. Madshus probably have the biggest cross-country skiing team comparing to its competitors Salomon and Fischer. Their team is really diverse, which people are from across the world, from the United States to Norway, Sweden,
Russia Federation, Germany, the Czech Republic to South Korea, Finland, Switzerland, and France.
In the Biathlon class, they have the legendary called Ole Einar Bjørndalen who unfortunately just announced to be retired for the 2018 winter Olympics. Ole Einar has an impressively won 13 Olympic medals which 8 of them are gold. He also won 45 world championship medals and 20 of those are gold. He is considered the greatest Biathlon skier of all time and one of the best skiers in general. Other members of cross-country skiing team of Madshus are also really impressive. For the instant, Heidi Weng and
Ingvild Flugstad Oestberg are both got lots of medals at the 2014 Winter Olympics. The last event is Nordic combined they had great Magnus Krog athletes who helped his team win an Olympics gold medal.
(Note: Biathlon is the sport where you ski, shoot and rifle. Nordic combined is when you have to do great at the ski jumping events and the cross-country skiing events. Both
Biathlon and Nordic combined are the types of cross-country skiing)
Madshus does not have its own stores, therefore, there is no physical "in-store team" for the customers. However, the sales team in the organizational and other staffs are extremely helpful and welcoming. They have such great knowledge based on their
24 personal experiences and the professional attitudes. They love the job they are doing and also they truly believe in the brand. I had such great experiences with the customer services as well as the interview with the international sales manager in Norway, Mrs.
Tone Sunde. She knows the brand very well and has such great ability to communicate and influence the others. With this current performance, I believe that Madshus sales team could easily make the successful deal and maintain their relationship with others customer in B2B wise (Business to business).
Process
The process is one of the most important factors in marketing since it directly affects the organisational execution of the products or services. A firm with great and structure process will impact the growth in profits, cost minimization and more effectiveness in business strategy. Madshus sells products via their official online store and in retail distributors physical stores. They work closely with their distributors so they can be able to keep track on the customer's satisfaction as well as customer's perspective on the wants need, and desires in the market. In the online store, the process will take about one to two- week maximum for the customer to get the product delivered home from their factory. It is only currently available in 14 countries all over the world. The products are all paid online via credit card and other online payments only. They do not have cash delivery as in some companies offering in the Czech Republic. In a physical store, which in this case are the sports retailers, the process is started from the personal interaction between the sale team member to a customer and they will be based on the discussion finding out what is the perfect solution (product) for the customer and establish the relationship with them.
For those who already their customer they will maintain the relationship such as providing extra benefits for them. The deal will be finished with the payment in the cash desk
25 counters and all sale team member will make sure that after leaving the physical store, all the customer will end up with a happy smile and the satisfaction level is the highest.
Physical environment
Madshus does not own any stores of their own, but in the distributors, store customer will feel the excitement of exploring new products or services, as well as the great feeling of having the variable of options from many different brands in just one place. In all the three biggest sports retailers in Norway called XXL, Intersport, and G-sport, people will listen to the fast beat, young and dynamic type of music in order to increase and motivate their need and excitement to purchase new products. While XXL is having main green and dark classy color as the background of the store, G-sport is having a lighter green with the white background wall, Intersport is having the combination of blue and red, as well as white background wall.
5.2. Madshus's Marketing/Advertising campaigns
“Advertising is the structured and composed nonpersonal communication of
information, usually paid for and usually persuasive in nature, about products
(goods, services. And ideas) by identified sponsors through various media”
(Arens, Schaefer and Weigold, 2015)
Print Catalogue
26
This is the Madshus 2017 official catalogue which shows and explains the new features of their skis, as well as how they made the skis and what goes into the productions. It also features the history of the company and how far of the way they have been in the market.
Finally, it contains all of their models and some extra interviews with the members of the team Madshus.
27 Online Photos
This is advertising for Madshus's Vintage collection on September 29, 2017. The picture shows how joyful and happiness of the people are while doing cross-country skiing.
Videos Promotions
28 This commercial features no special product but the amazing shots of two men skiing on
Madshus equipment in the beautiful nature. This shows how amazing and relaxing cross- country skiing can be.
This commercial exclusively shows the Madshus new RED racing collection which is made by professionals for professionals and introducing the new features of them.
Partnership
Madshus has a lot of partnerships, for example, the biggest race Vasaloppet, the breast cancer foundation, and the protein snack KIND. They are also the main partner for the cross-country skiing school called SportwinAB. SportwinAB is located in Karlstad,
Sweden which is about only one hour away from Oslo. They host events for amateur skiers and also the collaboration with Madshus hold seminars and training programs from retailers of Madshus. Even though it is in Sweden, a lot of their customers are Norwegian
29 because Swedish and Norwegian is almost the same language just like Czech and
Slovakian.
Events/Sponsors
Madshus is one of the main sponsors for Alliansloppet, the world's biggest rolling cross- country skiing race (23rd-27th August 2017)
TV/Radio Commercials
Madshus has no TV and radio commercials. This ad is shown on TV in Norway on the channel TV Uke, made by the company G-Sports which is one of the biggest sport equipment retailers in Norway and it features different pairs of skis and one of these pairs are from Madshus.
30 Celebrities Endorsement
Madshus’s biggest celebrity endorsement is with Ole Einar Björndalen, he is their top athletes on the team of Madshus with eight Olympic gold. He is considered a real
Norwegian hero. He has been skiing with Madshus for many years now and he will continue to ski for Madshus at the 2018 Winter Olympics.
31 VI. Fischer's and Salomon's current Marketing (Promotion) strategy
Fischer
Fischer has made a lot more TV commercials than Madshus as well as putting out longer well-made movies with all of their professional athletes. However, besides celebrities’ endorsement, Fischer doesn't really promote their cross-country skiing, so does Solomon.
Celebrities Endorsement
Fischer has had a long relationship with their biggest star and spokesperson Petter
Northug. The differences between Petter and Madshus's team member Ole Einar is not based on their skills as a skier, but their specialties. Petter is a very outspoken person who gets a lot of attention from the media constantly. It is because of his controversial cockiness and bold statements. Ole Einar may be praised by many people, but Petter is a person that either you are going to love him a lots or your despite him.
32 Salomon
Celebrities Endorsement
Sjur Röthe and Erlend Bjøntegaard are two famous Norwegian cross-country skiers that will be participating in the Winter Olympics with high expectations of winning, they have recently joined the Salomon team.
33 VII. Market Research Methods and Analysis
7.1. Observation
I have visited the two biggest local sports retailers in Oslo: G-sports and XXL, in order to create a better promotional campaign, and observe the consumer’s behavior: see who are the customers, what product they need and want to purchase; what they expected from a brand and their brand awareness.
The observation is in Appendix II
Summary:
After collecting and analyzing data, I come to the conclusion that the results quite different from the ones appeared in my survey. In the survey, people who have done and doing cross country skiing are most likely the younger people, however, in the store, 90% of the customers I saw were older people with the age of over 30. The other 10% were people in the age of 20 years old. Another thing is in the survey, most of the people participated are willing to spend a lot more money on cross-country equipment than the actual customers in the store. In the store, the main focus of people is more likely on finding the cheapest/affordable skis as possible, while in the survey people are more concerning about how good is the quality and the duration of the products and them willing to pay more than just getting cheap pairs of skis.
7.2. Survey
I created a survey in order to create a improve marketing strategy for Madshus company.
When the survey got done, I contacted my connections and acquaintances via email,
Skype, and phone call. My aim was the Nordics people since the thesis is written about
Norwegian market. The people were both either has or did not have deep knowledge
34 about cross-country skiing, which is a great thing since I want to observe broad perspectives. All of these participants are from Scandinavia countries includes Norway.
They are differences in terms of age group, interests and personal thoughts based on experiences about the market in cross country skiing.
1. Age
Knowing about ages of the participants help me observe the basic understanding of the demography. There are six participants in total. Out of six people, four participants were in the age of 20-25 and the others two were in the age of 45-55.
2. Gender
35 Knowing the gender also help me with the very basic understanding of the demography.
There are five men and only one woman taking the survey. The number of male respondents comparing to the female ones is in the ratio of 5:1.
3.Education
Based on the chart and table, we can see that 50% of the people who do not have university educated but the high school only. 22,22% are undergraduate and only 16,67% are at the postgraduate level.
4.Occupation
n
The results showed that none of the participants is unemployed. There is one student, however, he does have a part-time job at the moment. 83,33% of them are recently having
36 a proper job with different wages. Their jobs title are the administrative officer, solution architect, military officer and junior project manager.
5. What is your income?
Based on the chart and table, we can see that 50% of the people earn from 30-40 thousand
NOK per month, 16,67% has no income, 16,67% has over 50 thousand NOK per month and the rest 16.67% earn from 20-30 thousand NOK only.
6. How often do you do cross-country skiing?
There are more than 10 people were taking the survey in total. However, I only pick out six of them who actually play cross-country skiing sport. Out of those six participants, only one person goes less than two times per year, two people do cross country skiing
37 from 3-4 times, another two people go 4-5 times and the last one person takes cross- country skiing very frequently and he plays the sport more than 10 times every year.
7. Do you take it seriously or as a hobby?
The result shows that out of six people, four of them take the sport as a hobby, one person takes it very seriously and the last person does not sure what does he truly wants, it was a depends answer.
8. How much could you pay for cross-country skiing equipment? What is the limit?
Please explain your answer.
The price ranges are from 2000-3000 NOK which is the cheapest, then 3000-4000 NOK which is the medium, 3000-4000 NOK which is the high price range and finally more than 4000 NOK which is a highest. This highest price is almost double than the cheapest
38 pairs of skis on the market, but also half of the price for the professional skis equipment.
The result came out that most people which were 50% are willing to pay the medium price from 3000 to 4000 NOK, two people only want to buy the cheapest they could and only one person is willing to pay the highest price and even higher for the more premium if that is the case. The reason behind their option was based on the concern in term of quality of the product. They thought that was extremely important especially in cross- country skiing sport. Therefore, if the price is going to be higher, they will all willing to pay more than a normal average person would spend.
9. How do you feel about Madshus, Salomon and Fischer brands and why?
The result came out with five people feel Madshus as a proud Norwegian company with the real Norwegian spirit. They think the brand is the coolest and most popular among their competitors Fischer and Salomon. They all agreed that Fischer and Salomon are both great in their own unique way, however, they prefer using their nation's brand instead of others. According to them, Madshus does represent their nationalist pride very well that all Norwegians take a great part in. As well as Madshus team members are very influencing. Fischer is seen as a good brand because it is used by one of the most famous skiers Petter Northug. That's why people come to Fischer just so they could get the same equipment as him. Fischer is also seen as a sporty, flashy and fast. Also, in contrast, people are not really impressed by Salomon since for them Salomon products are seen as a lower quality brand and are owned by a Finnish company, which makes them sort of a rival to Norway and therefore looked down upon. They explained this as "it's just a culture thing". The rest one person does not truly care about what brand he is using because for him they are just the same anyway.
39 10. When you buy cross-country equipment’s, what category you care the most in term of quality, style/design, price? Please explain your answer.
This question is aimed at the customers' insights and understanding what are they highly evaluated on. In this question, all the younger people which were four of them only interested in the quality while the older people were more focused on the price and style.
I found this quite strange because normally it should be on the way backward. The only demographic that had such strong interest in style and design was the female one, while no males cared about it. The last person is concern about the price the most out of all category.
11. Are you into normal wax skiing or skin-skiing (no wax skiing)? Please explain your answer.
40 In term of normal skiing which requires wax and a lot of wax care in order to be fast and having smooth skiing process, versus skin-skiing which is the skiing without any wax needed, there are five out of six people prefer no wax skiing and the only one want the normal wax ski. This happens since wax care requires the knowledge and great skill as well as a certain long period of time to get the wax done smoothly. This result is the same which what Mrs. Tune Sunde, the International Sales Manager of Madshus told me that the 75% of the market now is shifting to non-wax skiing for the convenience.
12. Which channel/platform do you use the most? (TV/Radio/Internet/Social
Media) Please name the specific channel and how much time you spend on them per day.
In order to create the new promotion strategy for Madshus, I have inputted into the survey on which platform that people mostly used. The result came out with older people spend more time watching TV comparing to the younger. The young people prefer watching the live stream on their computer or mobile phone instead for the convenience. The most common TV channel is the government-owned called NRK, that host sports event such as football, swimming and winter sports. The average user spends about two hours per day watching TV included this channel. The same thing goes with the radio which is mainly listened to by older people while they are in the car to work. The young people prefer Spotify while are in the car or just listen to music from their phone in the public transportation. The most common stations are the RixFM, which is the rock classic of
Oslo and the news station called P1. The average listening time is over an hour per day per person. The time people spend on social media is way higher with the average of one and a half hour per day for older adults. For the younger this averages is about 3-4 hours per day. The most common site is YouTube, Facebook, and Snapchat with an average of
41 two and haft hours each, another site such as Instagram has an average usage around half an hour per day.
13. Are there any other activities you would like to do beside cross-country skiing during your free time? Please name them all and also specify if is it more or less comparing to what you used to do.
Since the market has been impacted negatively due to the lack of the weather, I made the question to participants of what other activities they would like to do besides cross- country skiing, in order to find out the new opportunities for Madshus to work on. The result showed that younger people tend to be more towards jogging and lifting weights while the older people in our survey were more active in bicycling. There are more activities available than those three, however, they are the most common ones.
14. When it comes to sports and outdoor activities, who is your great influencer and why?
When it comes to the greatest influencer especially in cross-country skiing sport, most people in the survey instantly think about the legendary Gunde Svan. The reason was
42 once during the team races, after he finished with his distance, instead of resting like everyone else in others team, he went back out to the track, ran after his teammates, motivated and shouted at them that they could rest after the race but do the best for now, for that moment. People have been wondering a lot about how he could still have energy left to run after his race and his teammates were skiing even. Gunde Svan at age 55 has a legendary status about his dedication and still appears a lot on TV as a host. Another giant influencer that people admire is definitely Madshus own Ole Einar Björndalen who has the most Olympics gold medals out of any Biathlon skiers. Both young and old people look up to him and he would be any company’s perfect spokesperson as they are truly inspiring and bringing such great positive energy to the others.
15. What colours bring you the true happiness and motivate you performing your best?
Many scientific studies have shown that colors bring such strong effect on human psychology as well as its work great from a marketing perspective. Based on the result of the survey, 88.33% of people found red and blue are the true best colors in term of motivating them to perform their best and bring them positive thoughts and happy emotions. The rest 16,67% of the people find black is the most attractive colors since it made them looks classy and prestige.
16. If Madshus launches a new product line about outdoor equipment for young people, will you be interested? Please explain your answer.
43
In order to come up with the properly integrated strategy, I planned to open a new product line for Madshus. Gladly, the result came out really positive with five out of six people are really excited and look forward to the new product line from Madshus. Only one person said no since he thought Madshus has enough products that they should focus on.
17. What will encourage you buying the new product line from Madshus? Please explain your answer.
Out of 6 people, only one person does not care and interested in buying any new product from Madshus. All of the people who were interested agreed if Madshus will do great on this upcoming Winter Olympics, they would take it as a great encouragement to buy any new products due to the great impact of influencers. Also, they said if they see some of the most popular skiers using Madshus’s products, it will lead to the higher chance of purchasing consumer goods from the brand.
18. Where do you want to hear about it? (Which platform/channel?) Please explain your answer.
In order to get some acknowledge on how I could approach customers while creating a new Marketing strategy, I asked people where would they want to hear about the newest
44 product. The result showed that all the people found the most convenient platform to hear about this would be social media because it is always easier to check out the newest, updated post on the phone as well as a computer, thank the great development of technologies. Second should be on TV or Radio channel when they watch the Olympics games or on the way to work or driving somewhere. Finally, is the newsletter from emails since they all check their mailbox several time per day.
19. Where do you want to buy those products and why?
The result shows that 100% people want to purchase these items from the large local sports retailers that are located all over the country such as G-sport, XXL, and Intersports.
They are the biggest and most common ones.
20. Is there any other thing you would like to share/contribute into this survey?
Please let me know.
Additionally, I asked people if there is anything else they want to contribute, and the outcome is 33,33% of the people are not very happy with the packaging since there is no protection which can cause the scratch easily. One person has no comment as he thinks everything is great with Madshus already. The rest of people think that Madshus’s promotion and marketing strategy are not strong enough and they need to be improved much better so more people will know about them as well as their events.
VIII. The New Integrated Marketing Strategy
Based on the research and analysis, I have successfully created with the new integrated strategy for Madshus with a product called "The multifunctional jacket", the improvement of new packaging and other promotions for celebrities' endorsements. Extension brand is
45 important since it is the main key for a firm to continually grow and achieve success. It also benefits the parent's companies in lots of ways which in this case is K2 sports. The customers now will have extra motivation to consumer product from Madshus, keeping them interested in the brand as well as avoiding the fall of customer's taste if the brand has no changing or improvement.
8.1. The multifunctional jacket
The multifunctional jacket is the combination of both line extensions and category extensions since the jacket already exists. However, it is only exclusive for athletics who is a member of Madshus team and it is made for cross-country usage or sometimes downhills skiing. I have found that people have such strong influence by these successful athletics, therefore, the aim of this new jacket is to help customers finally having their own victory stories just like those influencers.
Function wise, this will be a good jacket for either skiing, other outdoor activities or even just being out in the cold. In my research, there's a conclusion of people are now more active than ever before and customers now could have this jacket everywhere they go in order to achieve the best Norwegian spirit that Madshus brings for them. The jacket will be quite slim, but still warm and most important of all it will be able to breathe so you won’t feel all wet from the sweat. The manufacturing of the jacket will be responsible for the factory of Madshus parents company K2 sports since they already produce a lot of similar jackets. The jacket will be available in two colors: red with the little mix of white and black with a little mix of red. They both got engraved with the Madshus brand on the left chest. The little mix color will be on the side of the body and the arms.
The jacket price will be launched at 2500 NOK, which is a premium one. The reason behind this price is based on the Norwegian's statistics of incomes from the Norwegian
46 statistical office website, the willingness of people to purchase a product based on the observation and survey, as well as the product itself is really unique compared to
Madshus's competitors Salomon and Fischer.
This multifunctional jacket will be exclusively online in their official website and also available in three biggest sports retailers in Norway: G-sports, Intersport, and XXL, where most people usually shop and checking out the newest updates of the brand. The reason for this distribution is Madshus does not own any physical stores in Norway as well as Salomon and Fischer. This new jacket will be hanged executively in the right middle of the Madshus area in the store.
8.2. The Packaging
The packaging is really important since it not only protects the physical product from damage but also the perfect way to communicate the brand story. To increase the value of the jacket, we will add some extra accessories. The first one is a avalanches protection
GPS tracker chip so which work great with a smartphone application. Your family or friends’ member is now will be able to know where you are in the worst case when you get lost in the woods or in the mountains. This would also work as an alarm in case of avalanches. The other thing we will add is our stylish hanger made out of oak material with Madshus logo on it. Most hangers are plastic and quite ugly. We wanted to create something that people will keep around in their homes for many years. Also, this will help improve the brand image since Madshus is aiming to be a prestige and high-quality brand in the market.
47 8.3. Celebrities Endorsement
Celebrities endorsement is one of the most important promotion strategies for the brand especially Madshus. Celebrities will not only help to advertise as well as improving the brand image but also do such great job in influence the audiences. Based on the research and survey, I have found that most Norwegian people are highly influenced by the celebrities which in this case athletics who wins in the Olympics game. A lot of answers came out that customers wanted to get the same equipment as the influencer because they also want to achieve the same victory of successful and being as fast as the celebrities.
They all said that they watch the Olympics game either online with live stream or in the national sports TV channel in Norway. It is such a miss in opportunities for Madshus since it has a really huge and strong team of many winners in the Olympics season.
For celebrity endorsement, Ole Einar Björndalen will be the spokesperson together with
Heidi Weng that will represent the newest version of the jacket, the multifunctional one.
By marketing that it is the same type of jacket that they both use during the time they are competing the customers will be convinced that this jacket is a necessity. They will be mainly on social media newest post such as Facebook and Snapchat, then on the other marketing campaigns host by Madshus. There should also be a radio and so people could hear and have some acknowledge about the newest updates from Madshus while they driving on the road, either go to work or go out with friends and family. The radio ad should be maximum 30 seconds long of Ole Einar Björndalen talking about his story behind the success in the games and how he always having his new jacket with him. Ole
Einar Björndalen is such a great example to motivate people to work harder in order to achieve the best performances. Even though people might think with his age, he should rest and maybe enjoy the peaceful life with his family and friends. However, he is truly amazing and surprised people of always pushing himself to be faster and better.
48 According to him every day after he wakes up he set up his time and time his whole process from the moment out of bed until he is done dressing and getting ready. He makes sure that the timer is shorter and shorter each time. There should also be some certain type of event where people could meet him in real life, and actually, have the opportunities to compete with him in some fun and joyful activities. The winner of the event/competition will be award to win the brand new jacket from Madshus.
IX. Conclusion
In this paper, we look deeply into Madshus as a firm and how they could potentially improve their business in the market and being the lead among their strong competitors
Fischer and Salomon. At the moment Madshus potentially the biggest problem is the brand recognition is not strong enough international wise and they have quite narrow product lines with not that impressive packaging at all. Madshus have top athletes using their products, but they do not use the celebrities’ endorsement great enough that they could do in the first place. Madshus social media marketing is also quite weak and needs to be improved, in which one of a great way to do this is using their celebrities more and better to spread the brand recognition.
Economically, Madshus are doing fine for a company that only sell winter equipment and focusing only on cross-country skiing. The overall market in the winter sports products has had such a hard time in these last 5 years. Currently, Madshus is doing quite stable with some loss, but they could go close to break since their main competitor Fischer is currently losing almost 10 million per year. Market-wise we have come to the conclusion that Madshus should expand their product line by introducing and launching the new product such as a multifunctional jacket. The reason has they already produced jackets
49 for their athletes so why not sell the same or similar type to the public so the consumers can have the same story as their influencer as well?
Madshus is unique and different from their competitors in the way that they are a rare type of company that solely focus on cross-country skis and accessories for cross country while competitors like Fischer and Salomon have such wider selection of products and different focusing. This is not necessarily a poor thing economically, but in the long run, this hurts Madshus brand recognition as they are less known compared to their competitors. From the survey, I conducted the main thing to take out of it is that Madshus as a brand is quite unknown outside of Norway, but for the people who have interest in cross-country skiing regard it as a top brand in terms of quality and brand recognition.
This leads to people coming into the sport for the first time are more likely to pick a brand like Fischer or Salomon because they recognize the brand.
Madshus can improve their value of their product by for example offering a nice oak hanger to come with their new multi-functional jacket. Also to expand their focus on their celebrity endorsement and show off their top athletes such as Ole Einar Björndalen and
Heidi Weng both an Olympic medalist and will be competing in the upcoming 2018 winter Olympics. Madshus current strategy is to keep things simple and not to spend too much money on their marketing. They see themselves as a well-established brand with loyal customers and don’t do a lot to reach out to new potential customers. In this paper,
I have explained how they should change their views of this so in the long-run they could increase their revenue and profit. By increasing their product line into different winter sport other than cross country, they will be able to hit a wider target and therefore increasing their brand recognition this would lead to increased sales for all of their products.
50 X. Comments
It was quite challenging while writing this paper since there are not much information, data, and statistics in English related to cross-country skiing brands in general and
Madshus in particularly. The main factor causes this is the sport itself is not that extremely popular all over the world and the market is quite narrow. Madshus does not provide internal information to the public. However, the International Sales Manager was really kind and helpful. She was happy answering all the questions regarding the brand in her best of knowledge and experiences. Comparing to Fischer and Salomon when I was also trying to get an interview with the International Sales Manager, the attitude of the people in Madshus is way better. They respect the caller, talking in professional and friendly attitude. This leaves such a great impression and positive thoughts for me in order to create an improved marketing strategy.
51 Appendix I
Madshus Survey
Dear participant!
Thank you very much for the agreement of participation and the effort taking this survey!
I am Thu Trang Duong, a senior student at the University of New York in Prague, Czech
Republic. My major is Business Administration and specialization in Marketing.
These questions are the crucial part of my final thesis for the Bachelor's degree which aims for the better improvement strategy for the brand Madshus. There are 22 questions in total and it takes estimate around 15 minutes to complete.
Your answer is highly valuable and important to my research. The data is collected for me and will be used for market research only.
Thank you!
52 Your name is: ______
1. What is your age? ______
2. Which gender are you?
• Male
• Female
• Unisex
• Not specified
3. Education
• No university education
• Undergraduate
• Postgraduate
4. Occupation
• Student
• Unemployed
• Employed
If you are employed, please specify:
______
5. What is your income?
______
53 6. Do you cross-country skiing?
• Yes
• No
7. How often do you cross-country skiing per year?
• 1-2 times
• 3-4 times
• 5-6 times
• Very frequently
If your answer is very frequently, please specifying:
______
8. Are you considering cross-country skiing as a hobby or taking it seriously?
• I take it as a hobby
• I take it seriously
• I don’t know, it’s depends
9. What about other people that you know? Are they the same or different?
______
______
10. How much could you pay for cross-country skiing equipment? What is the limit?
Please explain your answer.
54 ______
______
______
11. How do you feel about Madshus, Salomon and Fischer brands and why?
______
______
______
______
12. When you buy cross-country equipment’s, what category you care the most in term of quality, style/design, price, duration, influencer, etc.? Please explain your answer.
______
______
______
13. Are you into normal wax skiing or skin-skiing (no wax skiing)? Please explain your answer.
______
______
______
14. Which channel/platform do you use the most? (TV/Radio/Internet/Social Media)
Please name the specific channel and how much time you spend on them per day.
55 ______
______
______
15. Are there any other activities you would like to do beside cross-country skiing during your free time? Please name them all and also specify if is it more or less comparing to what you used to do.
______
______
______
______
16. When it comes to sports and outdoor activities, who is your great influencer and why?
______
______
______
17. What colours bring you the true happiness and motivate you performing your best?
______
18. If Madshus launches a new product line about outdoor equipment for young people, will you be interested? Please explain your answer.
56 ______
______
______
19. What will encourage you buying the new product line from Madshus? Please explain your answer.
______
______
______
20. Where do you want to hear about it? (Which platform/channel?) Please explain your answer.
______
______
______
21. Where do you want to buy those products and why?
______
______
______
22. Is there any other thing you would like to share/contribute into this survey? Please let me know.
57 ______
______
______
Thank you in advance for your time and valuable contributions! I truly respect and appreciate your cooperation.
Wish you a pleasant day!
Thu Trang Duong.
58 Appendix II
Observation
Report 1:
Friday, November 3, 2017. G-sport store, Storgata, Oslo, Norway. 4:00 pm
I entered the store with my friend Anna. While Anna was looking into getting herself a new winter jacket, I sat down and observed the customers in the store. It was almost empty as we enter during the time most people was still at work. The store is quite small because it located in the most central part of Oslo. Typically, the majority of the customer are seniors. The rests are few teenagers and young adults. At that time there was only one man around 60 years old in the store. He was looking at cross country skiing equipment and discussing with a sales member the type of skis would fit him best. After half an hour
Anna still has not found her perfect jacket yet, we planned to leave. However, around
4:40 pm entered more customers. Majority of the new customers were in the between 30-
40. I assumed they stopped by since they all on the way home from work. They were interested in the winter jackets, indoor equipment’s such as indoor shoes and the younger people were looking at the floorball sticks and its equipment’s. I think most people in the store were looking at jackets because of the weather in Oslo had been colder. Since we have just entered November, plus there is rain almost every day, people seem skeptical and confused if they will actually need snow equipment’s or it will just go to rain all winter. Oslo has a warm temperature compared to the rest of Norway. The best skiing places are located in about 2-3 hours away from Oslo. If I have had to visit a store in a
Northern town, it would have been more focus on cross-country skiing equipment. Then
I talked to a sales employee called Silja. She said that the best sales period for cross- country skiing equipment is between January and February when most people get their one week of work just for winter activities. Therefore, this time period is still for most
59 people to think about cross-country skiing. After having no luck finding Anna the perfect jacket, we gave up then went out for dinner.
Report 2:
Saturday, November 4, 2017. XXL Store, Sentrum, Oslo, Norway. 1 pm
After looking up different sports stores online, we went to XXL, one of the largest sports retailers in Oslo for a wider selection of jackets. The difference between this store and G- sport is shown instantly since the moment we walked in. XXL more likely a large outlet store. Anna went straight up and looked for her jackets meanwhile I headed down towards the cross-country skiing area. There were a lot of customers in the store that day since it is the weekend. Majority of them were in the ages between 25-50 and children who are under 12 years old. At the cross-country ski section, there were three salespeople and 10-
12 customers. Two of them were in my age which is around 18-22 and the others were adults between the ages of 35 to 50. Half of them seemed to have window shopping only by glaring at the new models. In contrast, the other half were more actively trying on new boots, hats, and feeling the difference in stiffness of the skis. The second most popular model of the Madshus has currently discounted which quite interested people. I asked two women what they were looking for in their new skis equipment. Their answers were the same which they needed items with the reliable and low price. Because they wanted to be well-prepared for Vasaloppet, the biggest cross-country skiing race in the world that takes place in Sweden during February. The race is three hours away from Oslo and this will highly increase the number of people participating in winter activities in the north.
There was only one man there who looks like a professional skier around 20 years old that actually interested in the expensive models. After one hour in the store, Anna finally bought herself a perfect jacket and then we left.
60 Appendix III
Report from the Sales team members in the three biggest retailers in Oslo, Norway
This report is based on phone calls in the Norwegian language in order to obtain information’s about Madshus as a brand and its competitors: Fischer and Salomon. I asked sales team members what is the main colors for each brand, which one of them get their shelves empty faster as well as what product line is the best selling and why.
I. Intersport - Oslo, Norway
1. Store Sentrum - Sales member: Eirik
• The main color for Madshus is red, Fischer is neon yellow and Salomon is blue
• Fischer and Madshus equipment sell the most, however, this is really depending on the customer's need. Most of them are inexperienced and just simply looking for something cheap and casual. All of these brands have low price models and in this case, people just buy products based on their personal preferences in colors and sometimes influencers.
2. Store Linderud - Sales member: Thorlief
• The colors for Madshus is red mainly with some white, Fischer is the dark colors and
Salomon is blue or white.
• The most popular brand is Madshus since they are prestige to customers. However, I found products from all these brands are pretty even. The best sales will be based on the current and trendy market.
II. XXL - Oslo, Norway
1. Store Sentrum - Sales member: Axel
61 • The colors for Madshus are red and white, Fischer is black and yellow, Salomon is black and blue
• Madshus sells the most, Fischer is second and Salomon sells last.
• The most selling color is red since I think it shows the spirit of Norwegian. Definitely, the RED lines from Madshus are the best seller because of the quality and people who won Olympics use them.
2. Store Strömmen - Sales member: Martin
Madshus sells the most because it is Norwegian pride. They only sell in red and white colors. Fischer and Salomon sell about the same. Fischer mostly in green color and
Salomon is in blue. There is no product that sells most since no customer know exactly what they need. Therefore, it is important for us to do analysis and understand the customers whether they want to use for training, casual or competitive perspective. Skis equipment that is cheap and on sales usually sells best and very fast because a lot of people just want to buy something for the low price and don’t really care much about quality.
III. G-Sport - Oslo, Norway
1. Store Storgata - Sales member: Olof
• Madshus only comes in the red and white product, while Fischer is in darker color and
Salomon mostly in blue.
• Madshus sells the most because people recognize the brand and they know it is
Norwegian. Salomon sells bad and Fischer sells quite stable.
2. Store Byporten - Sales member: Sven
62 • Madshus is in red and white; Fischer is in yellow, green and dark colors; Salomon is in blue and white sometimes black.
• Madshus sells the most, Salomon sells the worst. However, a lot of people ask to buy the same brand as Northug has because they believe he is the best and fastest, and that brand is Fischer. Influencers play important roles in sales strategy.
63 XII. Bibliography
Work Cited
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65 Internet sources
Cross-country skiing - History and General Information
https://www.olympic.org/cross-country-skiing
Down Ski versus Cross-Country skiing
https://www.trails.com/list_22293_downhill-skis-vs-cross-country.html
Best destination and Brands for Cross-country skiing
https://www.visitnorway.com/media/news-from-norway/major-newspaper-ranking- names-norways-best-ski-resorts/
https://www.theguardian.com/travel/2000/nov/19/wintersportsholidays.wintersports.obs erverescapesection
http://www.bestproducts.com/fitness/equipment/g2084/nordic-cross-country-skis/
http://hiconsumption.com/2014/10/best-cross-country-skis/
http://en-us.madshus.com
Current Problem
Norwegian Statistical Office Websitesz
66 https://www.ssb.no/en
Norwegians exercise more than before
https://www.ssb.no/en/kultur-og-fritid/artikler-og-publikasjoner/norwegians-exercise- more-than-before
History and general information about Madshus
http://en-us.madshus.com/story
http://www.k2sports.com
Madshus's Brand story
http://en-us.madshus.com/story
Why is brand story important?
https://strategynewmedia.com/why-is-branding-important/
How color effect marketing
https://blog.hubspot.com/marketing/psychology-of-color
Madshus's Financial Status
67 http://www.hoovers.com/company-information/cs/revenue- financial.madshus_as.abc258f308dfe3b4.html
Fischer Brand Story
http://www.fischer1924.com/index.php?lang=eng&fo=timeline&fi=timeline
Salomon Brand Story
https://www.salomon.com/us/who-we-are
https://www.salomon.com/us/salomon-history
Financial Status Fischer
https://www.fischersports.com/en_en/fischer/company/fischer-sports
https://www.amersports.com/investors/reports-and-presentations/financial-reviews/
https://s3-eu-west-1.amazonaws.com/amersports/uploads/20160621134135/Amer-
Sports-Financial-Review-2016.pdf
Madshus's Product + Price
http://en-us.madshus.com/nordic-skis
Madshus's People
68 http://en-us.madshus.com/team
Madshus's Cataloge
http://www.kareszsport.com/catalogs/Madshus-Catalogue/
Madshus's Online Photo
https://scontent-dft4-1.xx.fbcdn.net/v/t1.0-
9/22008353_10155369698396281_6486618138856155048_n.jpg?oh=fdb5bd6128bf66 b8828cf1cc26a21c12&oe=5ACB1388
Madshus's Video Promotion
https://www.youtube.com/watch?v=_rXAC6ncwAg
https://www.youtube.com/watch?v=Z6mYyVgwenw
Madshus's Partnerships
http://en-us.madshus.com/partners
https://www.facebook.com/SportwinAB/
Madshus's Events/Sponsors
69 https://scontent-dft4-1.xx.fbcdn.net/v/t1.0-
9/21105693_1444193319007610_2715408007010678234_n.jpg?oh=06c5de34b1bd417
38b55221c415d8494&oe=5ACAAC87
Celebrities Endorsement
http://www.gettyimages.com/event/biathlon-world-championships-day-4-
607611073?esource=SEO_GIS_CDN_Redirect#ole-einar-bjoerndalen-of-norway- celebrates-with-the-medals-won-at-the-picture-id514073504
Fischer's Celebrities Endorsement
https://www.langrenn.com/index.php?id=5708043
Salomon's Celebrities Endorsement
https://www.salomon.com/int/blog/article/two-norwegians-join-salomon-nordic-team
Annotations for Charts and Photos
All the charts are made by me in Microsoft Excel
The photo of the hanger engraved with Madshus brand is also made by me via Photoshop
70