Sports World Case Analysis Essay

INTRODUCTION Sports World is a small independent sporting goods store in Sarnia, Ontario. It specializes in sports equipment and apparel. The store was struggling because of heavy competition from the large sporting goods chains. Sandy Smith, the owner of Sports World recognized that unless he significantly increased revenue within the next year, he might have to close the store. Sandy had tried advertising for most of the previous year. The results were mediocre at best. While the number of new customers and total sales had risen slightly, the increased revenues were largely offset by the costs of the ad campaign. Smith needed to determine quickly if there was a way to increase the return on his marketing investment. One of the highlights from her marketing program last year was the …show more content…
She recalled from her college days that RFM might be a good approach to help her target the catalogue mailing. But would this be enough? The retention rates were also not good. Should she address them? Sports World had a loyalty program but was it working? Sandy really enjoyed preparing advertising campaigns but with a marketing budget of only $50,000 this seemed to be unaffordable. Were there less expensive options? CUSTOMER SEGMENTATION Smith decided that an RFM analysis should be followed up by a segmentation analysis to determine which kinds of customers were most valuable to the Sports World. She scrolled through the customer list for a few minutes trying to decide how she should segment the customers. Smith had learned how to do Pivot Tables in Excel and thought she’d try that technique for segmentation analysis (see Appendix).

THE CHALLENGE Smith felt she now knew what had to be done to develop an individualized marketing strategy for single-ticket customers and she has called you in, as his assistant, to do the actual work. She has also provided you with the Excel