In late 2016, Magellan Boatworks, a manufacturer of customized, power "cruising yachts", through its VP of Sales and Marketing, Walt Robinson, is looking into a budget increase for 2017, amidst the economic challenges the company may face. Robinson is wondering if his team can still achieve profits even with a lower budget. He is also wondering if the company should spend its advertising and promotion budget to other allocations and change its marketing strategy and lessen its target market.
John A. Quelch; James T. Kindley
Harvard Business Review (917547-PDF-ENG)
June 16, 2017
Case questions answered:
- What is Magellan Boatworks selling? What are the benefits of a cruising yacht?
- Describe the consumer decision-making process for Magellan’s boats. What are the roles and timing for advertising, promotions, and sales interventions in this process?
- What are, and what should be, the objective(s) of Magellan’s Communications program?
- Should Magellan’s marketing message be altered? What message is appropriate?
- Should Magellan’s media mix be changed?
- Should Magellan’s sales process be altered? What enables two of its salespeople to significantly outperform their colleagues?
- Evaluate Magellan’s budgets for advertising/promotion and sales. Are they appropriate for the marketing task?
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Case answers for Magellan Boatworks
Problem Statement – Magellan Boatworks
Magellan Boatworks needs to know whether they need to request a budget increase or determine how to increase sales even if it had less money in the coming year.
Analysis
Market Segmentation
- Typical Male buyers, and couples
- Mid-age consumers: 40-55, usually bought sailboats
- Older consumers: 55+, larger group, bought powerboats.
- Income: $150K+ with a net worth of $1 Million+
- Geographically: Southeast, Mid-Atlantic, Northeast, Midwest
- Education Level: College, 25% postgraduate
Magellan Boatworks identified the above characteristics, and we can infer that type of consumer the company is targeting is seeking to cap-off their careers and coast into retirement. They want to travel in luxury and have their own retirement adventures. Several of their consumers want to fulfill their lifelong dream to have a second home they can call on the water that can provide them with value-added service.
Target Market
The ideal consumer groups for Magellan are…
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