Marketing Plan: Hunley, Inc.

Introduction

Charles Hunley III (C.W. III), president of Hunley, Inc., aims to increase Hunley’s sales by 10% in 2018. He needed to decide whether Hunley wanted to use different marketing and advertising to position itself in order to ensure that shipments of either line of rods could reach stores in time for the peak 2018 season. Since Hunley was unable to offer lower price points, unlike its competitors that were succeeding with higher-priced offerings, C.W. III felt his team needed to discover connections due to whatever reasons of either a new product line or a new distribution channel such as Walmart. 

In this marketing plan report, I will present a marketing plan for Hunley by analyzing the external environment and Hunley's current marketing decisions in order to determine the best way to achieve C.W. III’s objective, which is to grow Hunley’s sales by 10% in 2018 ultimately. 

External Analysis 

In this section, I am going to describe my analysis of the external environment by the industry that Hunley is in, competitors, consumer trends, channels, and the summary of implications for the company, including major opportunities and challenges.

Industry: The fly-fishing industry is a growing sports industry with a 7.4 billion dollar retail business of fishing equipment, including rods, reels, poles, and components that are a 2.5 billion dollars part of the business. Fly-fishing is different from regular fishing because it requires skill and special gear, and it attracts fish on the water’s surface by throwing a fly attached to a nylon filament line. The industry has a higher volume of sales during the seasons, starting in the spring and extending through the fall. 

PESTEL factors: Fly-fishing was an esoteric sport due to the significant cost of equipment and often involved expensive travel to reach the remote areas that ardent fly-fishers preferred. Nowadays, fly-fishing has become more general, and the recent National Report on Fishing addressed that enjoying time with family has been the strongest motivation for fishing. 

Competition: Over $20 million worth of fly-fishing rods have been sold annually through more than 25 companies, such as Orvis and Berkeley where are well-known suppliers providing full lines of equipment and accessories, and major sporting goods retailers such as L.L. Bean, Cabela’s, Bass Pro Shops, and Dick’s Sporting Goods that carry several well-known brands and offer their own private-label products. Most competitors focus on narrow market segments with specialized features for different use - Thomas & Thomas offering saltwater rods against strong winds with longer distances and more powerful rods, but some competitors sell multipurpose rods with flexibility. Most fly-fishing suppliers tend to be conservative in advertising and promotion with similar messages and visuals through ads. Most fly-rod manufacturers mainly concentrate on geographical characteristics based on distribution and marketing activities. For example, Thomas & Thomas sells its saltwater rods at coastal area distributors, sponsored deep-sea fishing tournaments, and hosted local saltwater fly-fishing clinics with well-known local fishers. Other fishing equipment companies promote their products as the choice of professionals likewise. 

Consumer trends: More than 47 million U.S. residents participate in fishing annually, and 32% of this group of people purchase rods annually at the price of $224 on average, and 6.5 million of them are fly-fishers. The age population of this consumer group, fly-fishers, is in a very wide range from 6 to 90 years olds. 65% of the consumers had a college education, 45% of the consumers have annual incomes above $75,000, 31% of the population are women, and 30% of the population are ethnic minorities based on Hunley’s market survey conducted in 2017. Consumers are likely to purchase the products often as gifts for Father’s Day and Christmas. 

Channels 

The fly-fishing channels and each characteristic are described in the table below: 

Implications: Based on the external analysis of the fly-fishing industry, I was able to find both opportunities and threats that Hunley might have in its business. C.W.III should be aware of the growing trends of the industry and consumer trends that they are likely to spend around $224 on average annually and purchase during the specific period from spring to fall, Father’s Day and Christmas. With the strongest motivation of fishing nowadays, even more positive growth in the industry is foreseen. Moreover, C.W.III needs to be aware of the advantages of specialty stores that give enhanced expertise value to their customers with higher margins and knowledgeable staff. These opportunities in the industry will increase the revenue while providing a sense of professional brand image to Hunley’s customers.

However, C.W.III would also want to be aware of some threats in the industry, especially the competitors with lower price points and prevailing in larger retailers. The competitors’ products will attract customers like beginners or those who go fly-fishing a few times a year for fun. Also, conservative advertising/promotions and ads with similar messages and visuals are what C.W.III would want to avoid in order to appeal to the customers by positioning itself while giving competitive differentiation from other competitors. 

Internal Analysis

I will describe what Hunley is currently doing in this section, including its current tactical decisions, current positioning decisions, and the summary of implications of strengths and weaknesses. 

Current tactical decisions

I will begin by analyzing Hunley’s current tactical decisions in this section, which includes Hunley’s product and price, place, and promotion. 

Product & Price: Hunley’s major product is freshwater rods with Klamath River brand using a new boron/graphite composite, which is stronger and more versatile than previous lines that generally consisted of graphite. There are three different lines under the Klamath River brand: the Classic, the Multi-Section, and the LongCast. Each of them has specific characteristics responding to various fishing conditions, and all of them are positioned as high-quality and multi-use rods. Hunley’s rods were priced between $200 and $800, and the average retail price of Hunley’s rods was between $400 and $500. 

Place: Hunley’s rods are sold at over 1200 specialty stores with great sales volume, around 60% of Hunley’s dollar sales and about 45% of its unit sales. Hunley has directly sold its products through an in-house website. The in-house website is managed by a direct sales manager and has several dedicated customer service agents in order to handle orders and questions from its customers. Also, Hunley decided to store its products at larger outdoor retailers for huge selection formats that attract customers in the early 2000s. 

Promotion: Hunley’s typical advertising and promotion budget take up 8% of its revenues, and 70% of this spending occurred between May and September. The rest of it mainly occurred between Thanksgiving and Christmas. Hunley advertises through multiple channels: print, Co-op advertising, Sponsorship, POS/sales sheets, PR, and Search-based advertising. Hunley mainly advertises highlighting product features and distinctions through print in specialty fly-fishing magazines, including Fly Fisherman and Flyfishing & Tying Journal, and focuses on targeting men between the ages of 35 and 55 and appealing of the brand to professionals. Hunley has put its effort into building deeper relationships with retailers and end-users in several ways. First of all, Hunley contributed up to 5% of the value of purchases of Hunley products toward the retailers’ store advertising budget that prominently featured Hunley merchandise. Secondly, Hunley sponsored professionals who provided visibility and credibility by participating in fishing tournaments and local events with retailers such as fly-fishing clinics and outings. Hunley also provided advertising specialty items to be distributed by sales clerks at the point of sale or during those events. Last but not least, Hunley benefited from word-of-mouth advertising by its customers and the support from its retail partners. Moreover, C.W.III decided to offer discounts to Hunley’s specialty stores in order to have the same pricing it provided to its large retailers as larger retailers have become more important to all market segments. 

Current positioning decisions 

This section will describe the analysis of Hunley’s current positioning decisions, including value proposition, competitive differentiation, target market, and brand identity. 

Value proposition: C.W.III has tried to give the set of prestige and bragging rights value by promoting an aspirational lifestyle to Hunley’s customers. Also, with Hunley’s products made with advanced materials and careful craftsmanship, the company offers professionalism and best performance for its customers’ experience with its products. 

Competitive differentiation: Hunley differentiated itself with the most advanced materials and the best careful craftsmanship among its competitors. These competitive differentiations Hunley has offered a valuable experience to its customers. Hunley, Inc. has a valuable and professional long history by C.W’s family. The company has been the most innovative company in the industry with continuous development for its products. The development of the company’s products allows the company to be recognized as a high-quality supplier that is in a class with the industry’s best as well as winning considerable praise from fly fishers. 

Target Market: Based on the Fly-Fishing marketing survey conducted by Hunley in 2017. The target markets are segmented as below: 

With the highest percentage of sales from Avid fly fishers, the survey described their dispositions as below: 

Avid fly fishers: 

• are product loyal and will purchase the equipment they feel provides the best performance that they can afford. 
• are somewhat brand loyal, and do equate rod quality with price and perceive a higher-priced brand as “more prestigious” 
• prefer shopping in specialty fly shops for their service, but they will seek value at larger stores, such as Cabela’s 

Hunley concentrated on freshwater fly rods targeting a variety of anglers, but the company believed that the anglers between the ages of 40 and 65 could commit substantial time and dollars to the sport, and those anglers are the primary target market of Hunley. 

Brand identity: C.W.III has tried to give the brand identity of the set of personality characteristics of a leading company within the industry with high-quality of its products that are professionally crafted. Also, C.W.III identified the need of addressing the prestige and bragging rights values of the avid consumer by promoting an aspirational lifestyle instead of continuing to highlight “great product with great features and benefits.” In order to keep being professional within the industry and provide the best quality products and services, Hunley’s representatives called on specialty stores three to four times annually to check inventory assessment and promotional product demonstrations. Moreover, they visited major stores as often as once a month for doing demos, taking inventory, and ensuring stock. This careful management style has benefited the company to position itself as a professional company in the fly-fishing industry. 

Implications

Based on the internal analysis of Hunley’s current tactical strategies and positioning strategies, I was able to find the strengths and weaknesses of the company. Hunley’s professional management style caring the relationships with its specialty stores is one of the strengths that Hunley has. Also, Hunley’s competitive differentiation from its competitors is very attractive for its customers and will bring an opportunity to the company to gain brand recognition and loyalty from its customers. One opportunity I found from the internal analysis is its target market - Avid who shows the highest percentage of its total sales - and Hunley could prospect a great growth in its revenue. 

Hunley currently lacks in its promotional strategies, which is offering discounts for its specialty stores in order to have the same price as it’s provided at large retailers, which leave lower margins. This strategy has impacted the brand image in the public that has made Hunley to be viewed as a mid-tier marker. Consumers are likely to equate quality with price and believe the higher price would have better quality used better materials that could make product expensive. C.W.III should be aware of the place where Hunley wants to actively engage in order to convey the brand identity effectively to its customers. 

Evaluation of Alternatives 

I will now evaluate two different alternatives available to C.W. III to meet his objective – increasing the sales by 10% in 2018 – with opportunities and risks for each option. The two alternatives I have chosen for C.W.III could take are:

        1. Mainly focusing on distributing to specialty stores and expanding accessories lines, such as bags, rods cases, etc. 

                    In this option, Hunley would distribute its rods only to specialty stores, but could still have connections with larger retailers by putting its accessories lines. 

        2. Actively engaging in distribution through larger retailers.  

                    In this option, Hunley would actively distribute its products to larger retailers - Walmart - for the comprehensive approach to various customers. 

Based on the evaluation of those two options, I see more potential benefits and greater possibility to achieve C.W.III’s objective from option 1, which mainly focuses on distribution at specialty stores and developing its accessories line in order to distribute to larger retailers. 

Recommendations 

I will now present my recommendations for Hunley about the first option from above. The first option is viewed as the best prospect for C.W.III could take with the opportunities it has by keeping the company in a class with the industry’s best as well as allowing the company to be recognized as a high-quality supplier like it was in the past. The recommendations include a positioning strategy and tactics. I am confident that implementing these recommendations will enable C.W. III to meet its objective of increasing sales by 10% in 2018. 

Positioning Strategy 

In this section, I will present the positioning strategy for Hunley. I will include the recommended target market, value proposition, competitive differentiation, and brand identity decisions needed to meet the objective of 10% increased sales in 2018. 

Target Market 

I will now prioritize the four segments of Hunley’s customers who are beginners, occasional, avid, and competitive. For each market segment, I will analyze how important they are to Hunley’s success and achieve C.W.III’s objective. 

To sum up, Hunley should focus on targeting avid based on their behaviors demonstrated by the survey, mostly shopping at specialty stores with high product and brand loyalty with a high percentage of sales. Additionally, as it originally has targeted, Hunley should keep focusing on targeting the male anglers between the ages of 40 to 65 who are likely to commit substantial time and dollars to the sport. These people in the group will likely have better stability in their occupations or have enough time for the sport if they retire. Moreover, the company should actively approach people in this group, especially closely living in the areas where there are places for freshwater fly-fishing. 

Value Proposition 

I recommend no changes here because what C.W.III has tried to give to the customers is strong enough to attract them by creating value for its customers. Hunley has loyal customers who have been using its products based on their past experiences that they perceived. Hunley’s products with advanced materials and careful craftsmanship are a great value that Hunley currently has and should continue to appeal these values to its customers. 

Competitive Differentiation 

Hunley’s competitive differentiation is strong enough to be distinguished from its competitors. I recommend no changes here as well. Hunley’s the most advanced materials and best careful craftsmanship are the key for the company to get back its prestige that Hunley used to have in the past - a high-quality supplier that is in a class with the industry’s best and won considerable praise from fly fishers. 

Brand Identity 

As C.W.III identified, Hunley should promote an aspirational lifestyle approach instead of an existing message like “great product with great features and benefits.” Hunley needs more loyal customers in order to increase sales revenue and creating values for its consumers are essential. Based on the strongest motivation of fishing from external analysis, Hunley should take an opportunity of approaching people with values of enjoying time with family, and try to create family-oriented feelings to its customers, which will allow the company to build stronger relationships with loyal customers.

Tactical Decisions 

In this section, I will present the tactical decisions needed to implement my recommended positioning strategy. I will discuss the recommended product, price, promotion, and place decisions needed to meet the objective of 10% increased sales in 2018. 

Product 

Hunley should introduce more accessories like additional fishing gears in order to put them at larger retailers, including bags, rod cases, bait cases, etc. Having more of those accessories will allow Hunley to expand its distribution without taking the risk of losing its brand reputation. Hunley will be able to have accessories at larger retailers instead of its rods, which has put the company in a hardship situation lowering the prices at specialty stores. 

I also recommend developing the product aesthetically. With the luxurious color/design of its products will become more attractive and give the feeling of being proud of owning/using the products for its consumers. For example, using a simple design with black background and gold color of line around on a handle with Hunley’s logo. This design with black and gold colors will give luxury and a classy feeling for its customers by using the rods. 

Price 

I recommend staying with the current price without discounts for the rods. Hunley has dropped to a mid-tier supplier among the public due to offering discounts at specialty stores to meet the price provided at larger retailers. Hunley would not want to lower or higher prices because this action might confuse customers as well as a brand identity will be vague if Hunley cannot explain the clear reasons, such as significant improvement or development of each product, for the price change. 

In terms of accessories, I would suggest looking into its top competitors' prices that are in a top class in the industry at Walmart. The prices for accessories shouldn’t be too expensive since they will display at Walmart where people normally shop for items with low prices. The margin for each accessory should be around 50% (each unit contribution should be less than 25% of the 10 retail selling price) in order to meet C.W.III’s objective without losing money by getting into the large retail market where it is likely to ask to commit to a quarter-million in advertising dollars to support this offering initially, Walmart in this case. 

Place 

Hunley, Inc., should only produce its rods at specialty stores and its in-house website, and additional accessories at both specialty stores and large retailers, especially at Walmart and Amazon. Hunley should take advantage of the growing industry of large retailers, but should separate item categories that it will place at each place. Separating those two different categories and distributing them to different locations will enhance its position as a top-quality producer and keep its value and brand identity clearly from its competitors. 

With this recommendation, Hunley will be able to keep its consumers feel special by providing its merchandise access only at specialty stores, and these consumers will become likely to add value to the brand with limited access to its products. Moreover, this strategy will generate the sense of desire to get into this market, shopping at specialty stores, for market segments who were less likely to shop at specialty stores - beginners and occasional anglers.

Promotion 

I suggest using both pull and push strategy for Hunley’s promotion. Hunley should use push strategy at Walmart and Amazon to appeal to people in the segments of beginners and occasional. A push strategy that Hunley could take would be buying ads on both channels at Walmart and Amazon. This strategy would display Hunley’s products at the top, which will generate more sales and reviews about the products that people normally care about the most when they shop new items. Also, this will make it easier for Hunley’s existing customers by reducing the hassles of going to a specialty store to purchase a few accessories or scrolling/searching for those products. 

In order to attract its main target customers, Hunley should use pull strategies, and it would be providing specialized customer service like free maintenance of their equipment. Hunley’s primary target customers, as I described above under the target market section, will add value to this service with the feeling of being taken care of by the company as valued customers. Another pull strategy would be providing membership for Hunley’s products. The membership would work as an earning point system, in which a consumer will earn points depending on the item they purchase. In terms of rods, a consumer would earn 5% of the purchase price, and 2% for accessories. This strategy will become attractive for its customers by giving them the feeling of rewarding, and will allow the company to have more loyal customers. 

Conclusion 

With all of these recommended implementations, C.W. III will be able to meet his goal in 2018. The adjustments and implementations are to place Hunley’s products at the right place for each market segment, create family-oriented value for the brand identity, develop accessories line and product design, have profitable pricing for accessories at larger retailers, and use promotions to appeal to its target market. My recommendations will be the best way for C.W.III to meet his objectives with the least risks following with all developed both current tactical and positioning strategies based on my deep analysis of opportunities and threats from the external environment and Hunley’s strengths and weaknesses.