XVIII. Case Study:

THE ELECTRIC FEATHER PIROGUE: GOING WITH THE MARKETING FLOW

The Fin and Feather Products Company of Marshall, Texas, produces a line of small, versatile, lightweight boats called the Electric Feather Pirogue (pronounced per6). The term «feather» was chosen to emphasize the light weight of the boat and «electric» because it is propelled by an electric trolling motor. The name Pirogue refers to the historic small riverboats used on the Louisiana bayous. The kayak-shaped boat is 12 feet long, 38 inches wide, and 12 inches deep. It comes complete with motor and has a load capacity of about 540 pounds. Power is provided by a standard 12-volt automotive-type storage battery. The built-in Shakespeare motor is available with 18-pound or 24-pound thrust. The hull is handcrafted fiber­glass, sturdily constructed by a hand-layup process.

The stable, flat-bottomed Pirogue can operate in very shallow wa­ter, so it is ideally suited for fishing, duck hunting, bird watching, or just leisure stream cruising. The propeller is protected from sub­merged objects by specially engineered motor guards on each side of the exposed drive unit. A 1/2-inch sheet of polyurethane foam is built into the bottom to provide flotation. The boat is extremely simple to operate. A panel just below the wraparound gunwale contains two control switches—a forward-off-reverse switch and a low-medium-high speed switch. A horizontal lever just above the panel provides steering control. There is only one moving part in the entire control system. The 3-speed, 18-pound thrust motor has a maximum speed of 10 miles an hour, and the 4-speed, 24-pound thrust motor can attain a speed of 14 miles an hour. The company furnishes a one-year unlim­ited warranty, on the boat, and the Shakespeare Company provides a similar warranty on the motor.

The company produced only one basic model of the boat but offered optional equipment that provided some variation within the product line. Retail prices ranged from approximately $ 490 to $ 650, depending on motor size and optional equipment. Although de­signed to accommodate two people, the standard model has only one molded plastic seat. The second seat, deluxe swivel seats, marine carpeting, and tonneau cover are the major optional items. No trailer is required because the boat fits nicely on the roof of even the small­est car or in the back of a station wagon or pickup truck. Without battery, the Pirogue weighs only about 80 pounds and can easily be handled by one person.

In Year 1 (the base year), Mr. Bill Wadlington purchased control­ling interest in, and assumed managerial control of, the seven-year-old Fin and Feather Products Company. One of Mr. Wadlington's first moves was to adopt a strict cash-and-carry policy: Supplies and equipment were paid for at the time of purchase, and all sales were for cash prior to shipment whether shipment was to a dealer or directly to a customer. All shipments were F.O.B. the factory in Marshall, Texas. As a result of this policy, the firm has no accounts receivable and vir­tually no accounts payable. Mr. Wadlington anticipated sales of be­tween 800 and 1000 units in Year 1. This volume would approach plant capacity and produce a wholesale dollar volume of approxi­mately $ 350,000 to $ 400,000. After only six months of operation, Wadlington would not predict an exact annual net-profit figure, he was very optimistic about the first year's profit prospect. It was also difficult to predict exactly what future volume would be, but sales had shown a steady increase throughout the first half of the year. The flow of inquiries from around the United States and from several for­eign countries made the future look bright.

The company hired no outside salespeople, and Mr. Wadlington was the only in-house salesman. There were 15 independent dealers around the country who bought at wholesale and assumed a standard markup. There was no formal agreement or contract between the company and the dealers, but to qualify as a dealer, an individual or firm's initial order had to be for at least five boats. Subsequent orders could be for any quantity desired. Dealers' orders had to be accompanied by a check for the entire amount of the purchase.

In addition to the dealers, the company had 20 agents who were authorized to take orders in areas outside dealer territories. These agents accepted orders for direct shipment to customers and were paid a commission for the boats they sold. Agents were not assigned a spe­cific territory but could not sell in areas assigned to dealers. As with all sales, agent orders had to be prepaid. Direct orders from individu­als were accepted at the factory when the customer lived outside a dealer territory. Most direct sales were the result of the company's ad­vertisements in such magazines as Ducks Unlimited, Outdoor Life, Argosy, Field and Stream, and Better Homes and Gardens.

Mr. Wadlington had not established a systematic promotional pro­gram. The services of an out-of-state advertising agency were used to develop and place ads and to help with brochures and other promo­tional materials. Almost all negotiations with the agency were handled by phone or mail. The amount of advertising done at any time de­pended on existing sales volume. As sales declined, advertising was increased; when orders approached plant capacity, advertising was curtailed. Magazines were the primary advertising medium. The deal­ers and agents were provided with attractive, professionally prepared brochures. The company had exhibited, or had plans to exhibit, at boat shows in Texas, Ohio, and Illinois. Arrangements had been completed for Pirogues to be used as prizes on one of the more popular network game shows.

A detailed analysis of sales, in terms of who was buying the boats and for what purpose, had not been made. However, Mr. Wadlington did know that one of the most successful ads was in Better Homes and Gardens. An examination of orders produced by the ad indicated that they were primarily from women who were buying the boat for family use. There had been reports of the boats being used as utility boats for large houseboats and yachts, but the extent of such use was unknown. Although orders had been coming in from all parts of the country, the best sales areas had been in the eastern and southeastern parts of the United States. Mr. Wadlington attributed this, at least in part, to the fact that the company's past sales efforts had been concentrated al­most exclusively in the southern and southwestern areas of the coun­try. After the company began using national media, totally new mar­kets were tapped. The Pirogue had virtually no direct competition, particularly outside the Texas-Louisiana area.

Questions

1. Is Mr. Wadlington practicing the marketing concept? If not, which of the marketing philosophies does he I follow?

2. What are the characteristics of the people who make up the market for the Electric Feather Pirogue? Describe the needs and wants that are satis­fied by the product.

3. Mr. Wadlington seems to be opposed to changing his present marketing system. Apparently, he believes that his current plan is working because sales are strong and profits are satisfactory, and he would ask, «Why not stick with a winner?» How would you respond to Mr. Wadlington's assumptions?

4. What recommendations would you make to Mr. Wadlington if he wanted to adopt the marketing concept?

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