Foundations of Marketing 5th Edition by Ferrell,William Pride

Exercise 9

Eastern Mountain Sports Is Poised to Climb Higher
One of the original outdoor specialty retailers, Eastern Mountain Sports (EMS), was founded by two Massachusetts-based rock climbers, Alan McDonough and Roger Furst, in 1967. Their venture emerged out of frustration when trying to purchase suitable ice-climbing axes within the United States. They saw a market need and decided to fill it themselves.
Shortly after opening their retail outlet, McDonough and Furst also opened the first mountain-climbing school in the United States, the Eastern Mountain Sports Rock Climbing School. From that first location, the school grew and now has five locations and eight East Coast satellite schools, making it not only the oldest but also the largest climbing school in the country. Since their foundation, the retail store and the school have worked handin- glove by teaching people how to be expert climbers and then selling them the gear they will need to pursue the sport.
McDonough and Furst were never committed to being businessmen, and after a decade of running EMS, they sold it in 1979. Over the next 15 years, EMS changed owners several times before landing under the ownership of a management team led by Eastern Mountain Sports CEO Will Manzer in 2004.
With dozens of stores in 16 states, the turnover in ownership didn't stunt the company's growth, but it did have an impact on its original vision-equipping the extreme-sport enthusiast-and subsequently resulted in some financial turbulence. Under the various owners succeeding McDonough and Furst, EMS began to transition toward more mainstream gear, including items such as everyday backpacks. By 2003, when Manzer took over, the company had become a "Gap with climbing ropes," as he described it. In his view, EMS had no real distinguishing characteristics and stocked the same equipment offered by numerous other chains.
Manzer was determined to take the company back to its roots of serving climbers, hikers, bikers, and other extreme-lifestyle seekers. Although some people thought this would be risky, the goal was to help EMS regain its focus and earn the loyalty of its original target market. Manzer hoped to differentiate the company from the competition by becoming the go-to place for the best gear.
As a result, EMS has become the company that will stock $1,400 sea kayaks with ergonomic foot contours and waterproof storage areas. It may sell only a few, but hardcore outdoor enthusiasts know that they can go to EMS and always find what they need.
EMS's online retailing operations bring in significant revenue, which is why it has taken steps to ensure that its website and customer service are top-notch. The company also uses business intelligence software to track consumer preferences and get a better idea of what consumers at each location would like and in what quantity. Everyone from the CEO down to a store manager has access to the same data, making it easier to see which products and promotions are successful in order to better create successful promotions, store layouts, and stock decisions.
With high-tech software support and a renewed focus on target market, EMS's success has climbed despite increasingly difficult economic times. In fact, the chain's locations now span the Eastern seaboard, from Maine to Virginia, although the website gives EMS a national presence. New store locations have extended product lines, including a revised design meant to appeal to young consumers and features like custom bike shops with around-the-clock technicians. Highlighting bike offerings is a strategy that is paying off in times when people are searching for cheap means of transportation.
These days, the company is still opening new stores, but it's also moving out of shopping centers as older leases come up for renewal. It now prefers 15,000-square-foot free-standing stores located in lifestyle shopping centers or urban centers, ideally in or near areas where people enjoy outdoor activities. The recession hurt the entire retail industry, and EMS was no exception, so it has been keeping a close eye on expenses as the economy improves. The retailer is also boosting profit margins by stocking more private-branded products. Given EMS's renewed focus on core customers, and its most recent decisions about choosing retail locations, the company is poised to climb even higher in the coming years.
What changes occurred at EMS that caused the company to lose its unique retail position