Schwinn Bicycles Marketing Case Analysis Essay

926 Words Mar 16th, 2008 4 Pages
1. What are the strengths and weaknesses of Schwinn? What opportunities and threats face the company?
A. Strengths
a. Schwnn brand is known for quality with more than 100 years experience manufacturing bicycles.
b. Schwinn is under new management with vision and direction. This new management is not afraid to compete within the high end target market.
c. Schwinn can offer high end consumers the prestige of "Handmade in the USA."
d. Under new management Schwinn has streamlined their manufacturing process to greatly reduce cost.
B. Weaknesses
a. Schwinn brand is known for heavy duty low cost street bicycles. The kind ridden by the target consumers' parents.
b. Schwinn has made poor decisions regarding product offering and have
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Schwinn is not shutting them out of the market by providing a bicycle and pricing that bicycle beyond the needs and means of these base consumers. Also, Schwinn is able to meet or prevent competition, stabilize price and margin, and acquire target market share.
B. Pros
a. Schwinn is able to appeal to a broader consumer base.
b. Prevents Schwinn from focusing exclusively on the high end mountain bike segment.
c. Schwinn's pricing strategy helps segment the market.
d. Schwinn does not shut out the low cost market, and is able to maintain its existing older and loyal consumer base.
C. Cons
a. Schwinn risks diluting its brand as a high end, high performance, top of the line mountain bike manufacturer.
b. Schwinn risks a pricing war with competitors.
4. Discuss how demand factors might affect on pricing decisions for Schwinn. Address the following issues: (a) number of potential buyers based on age, education, and gender, (b) economic strength of potential buyers, (c) use of price as an indicator of product quality, (d) degree of elasticity of demand, and (e) use of prestige pricing.
A. Surprisingly college educated men and women within the 35-64 age range have the greatest potential to purchase a new bicycle. This consumer segment purchased 17,311,000 bicycles.
B. Again, am surprised to see consumers with household annual incomes greater than $60,000 have the greatest potential toward purchasing high end bicycles.
C. Price and

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