1. Presentation by: Julie Perkins & Jody Vail March 21, 2006
Lady Foot Locker
Presentation by: Julie Perkins & Jody Vail
March 21, 2006

2. Situational Analysis Founded in 1982 More than 600 stores nationwide
Athletic footwear industry offers a wide array of product segmentation
LFL specializes in athletic footwear, apparel, and accessories
There are very few retail chains that specialize in athletic footwear for women exclusively
Competition consists of department stores, and apparel specialty shops

3. Situational Analysis
Strong relationships with key suppliers is essential:
Current products on shelves
Special make-up products
Highly competitive markets
Advertising & in-store marketing
Negotiate for:
pricing
product exclusivity
shoe design
colors
material
matching apparel

4. Situational Analysis Technological advances:
Aided in developing further differentiation in the industry
Increases consumer demand and competition
Shortened product life cycle
Promotional activity consists of:
Health magazine “Race for Women”
Sponsored events such as fitness classes, and spa treatments w/ well known instructors
Receive market funds from vendors for advertising, in store displays, and sales associate education for products
Athletic event sponsorships

5. Situational Analysis Trends within industry:
Prior to LFL, women were purchasing Keds & Canvas shoes
It is now possible to find a sneaker for every activity or sport and even casual wear
The athletic footwear market has declined over the past couple years

6. Situational Analysis Objectives & Constraints:
Staying current with new and updated products
Working to secure product exclusivity (very hard due to other competitors within the industry)
Financial Condition:
Strong financial position
Pricing strategy allows them to reduce inventory quickly and still maintain profits
LFL is currently #3 in the top ten retailers for total pairs sold
History of Problems:
Suffered one huge product launch failure (Swoopes II)
Initially product only sold 3%-4% per week and was forced to markdown after only 10 weeks
Issue at Hand:
Whether or not to launch a new product (Rebecca Lobo Reebok sneaker)
Product exclusivity
When to start advertising and launch product

7. Marketing Strategy Target Market: 18 – 37 year old active females
Likely to be active in sports, fitness, and family life
12 – 17 year olds represented an important secondary market
Sales however occurred across a broad age segment, the LFL customer was considered to be somewhat ageless market
Total U.S. Athletic Footwear Market (% of total pairs sold by consumer segment)
Footwear Category
1995
1996
1997
Aerobic
5.0%
5.8%
5.4%
Cross Training
11.4
10.3
10.5
Basketball
2.8
9.7
9.2
Tennis/Court
4.1
5.1
4.5
Running
10.1
8.5
8.7
Casual Sneakers
25.5
33.4
34.5
Walking
26.1
24.9
25.2
Other
15.0
2.3
2.0
100.0%

8. Market Analysis U.S. Athletic Footwear Market (% of total pairs sold by footwear category)
Segment
1995
1996
Men (17 + years)
33.0%
35.3%
Women (17 + years)
41.8
39.8
Boys
10.2
11.2
Girls
7.1
7.7
Infants
7.9
6.0
100.0%

9. Marketing Mix Variables
Product:
Due to growing consumer demand, consumer segmentation, and increased competition, manufacturers frequently introduce new products which shortens product life cycles
Pricing:
Based on 30% – 55% supplier gross margins on wholesale selling price and 45% retailer markups on the retail selling price
Typically offered at full suggested retail price for 1st two weeks
Shoes were not marked down until they fell below a 10% weekly push
Retail Channels:
Competition was based upon several factors: 1) target consumer segment, 2) price,
3) merchandise assortment, 4) store reputation, 5) store location, 6) advertising, and
7) customer service
Promotion:
Celebrity endorsements
National brand and image campaigns

10. Marketing Expenditures Total Advertising Expenditures for the Top 10 Athletic Footwear Brands
Rank
Brand
1997 (in millions)
1996 (in millions) 1
Nike
$159.0
149.0 2
Reebok
55.0
84.0 3
Adidas
21.0
14.0 4
Fila
15.0
13.0 5
Converse
8.0
5.0 6
New Balance
4.0
3.0 7
Keds 8
Airwalk
2.0
9.0 9
Asics 10
Foot-Joy

11. Lobo Launch or No Lobo Launch?
Facts surrounding the decision:
The Lobo shoe would incorporate Reebok’s Hexalite technology
Lobo’s contract with Reebok enabled them to involve her in product endorsements and ads, store appearances, and speaking engagements
12-17 year olds would be critical to reach due to their buying power, in the past this segment bought shoes based on fashion, styling, and brand appeal rather than performance
When to launch the product:
June at the start of the inaugural WNBA season or October when school basketball season begins?
Retail Exclusivity:
LFL desired exclusivity to help differentiate
Marketing Support:
Reebok would provide the launch plans and marketing funds (television, print, and in-store merchandise displays)
Can a female athlete drive product sales or at least create demand?

12. SWOT Analysis Strengths:
3rd highest % of total pairs sold within a given year
Great reputation for supply of women’s athletic shoes
Few other chains specialize in women’s footwear
Largest portion of sales during back to school season
Prides itself on service
600+ store chains strengthens relationship with vendors
Power to solely own the Rebecca Lobo launch
Weaknesses:
Sales below that of Footlocker and Kids Foot Locker
Swoopes II launch failure
12 – 17 year olds do not purchase shoes for performance
Web page is not kept up to date
Lack of creative advertising

13. SWOT Analysis Opportunities: More product segmentation
Technologies designed to enhance performance
Increase in women’s sports participation
Lobo contract enabled product endorsements, ads, store appearances, and speaking engagements
12 – 17 year olds critical is proceeding with Lobo launch also offer athletic wear and accessories to match
Threats:
Sales within industry starting to fall
Increasing demand for men’s and children’s shoes
Discount stores

14. The Decision Launch Lobo shoe with Reebok
Take minimum amount of pairs for exclusivity (15,000)
Price product at $80.00
Advertising and promotional support to commence in June
October delivery date for purchase
Rebecca Lobo is well known among teens and with solid marketing efforts the market can be reached effectively
The Hexalite technology can be marketed as an attractive lightweight active wear shoe providing a great deal of comfort
First 5,000 pairs sold will receive one of the following
free tickets to a Lobo game
photograph with Rebecca Lobo
autographed accessories or apparel
team shirt