By: Conner L, Daniel N, Gerardo S, Matt W, William S
Situation Analysis Summary
Cowbucker was founded in 2012 after three friends at the University of Oregon wanted a hat that would solve multiple problems. “The Bucker” was their solution which is their mix of a trucker hat and a cowboy hat. It is a cap that allows the head to breathe like a trucker hat, but prevented the “redneck effect” with a full brim for 360-degree shade.
Recently Cowbucker has expanded their products to include all kinds of hats, such as, Beanies, Trucker Hats, Strawhats (Cowboy Style), Boonie (Fisher hats), Dad Hats, and even Fanny Packs. Cowbucker collegiate team headwear still makes up a core part of their business and they target the 18-25 age range. Their Bucker is about $35 and other hats are around $25. Their unique design paired with branding from college athletic teams allows them to stand out in a crowded market. They have licensing partnerships with dozens of college teams.
Recently Cowbucker has introduced hats beyond the standard Bucker. With their motto “Better Adventures” they are psychographically targeting outdoor adventurers. They have also moved into a style they term Dad Hats. “Kick ass hats. Better adventure” is their motto. And the second half is associated with a active lifestyle falling under the segmentation variable of behavior. As seen on the website, many of the people pictured are outdoors, hiking, fishing, camping, and even tailgating. With this, Cowbucker seems to be expanding their brand to target a more generic audience. First was “The Bucker” which gave a “redneck” styled look, and now they are offering product like, trucker hats, dad hats and even fanny packs.
However, this strategy is not without its large perils. They are known for one unique hat design and now are moving into generic hats that are already dominated by brands like Nike who are armed with incredibly well funded marketing and distribution channels. Outside of the dominate brands, there are a significant number of hats from small brands being sold on Amazon.com. A simple search for “trucker hats” on Amazon brings up 30,000+. The everyday outdoor demographic Cowbucker is now targeting, is dominated by outdoor brands such as Bass Pro Shop and Cabela’s. These brands have gained market share through a history of quality products and branding.
Cowbucker has shown strengths in their ability to cultivate licensing deals and design ability to make good looking “Buckers” that match the team. We recommend they should focus on “tailgating sports” where spectators spend time outside and where “The Bucker” makes both functional and social sense. As stated earlier, the licensed sports apparel store industry in the US had $7.8 billion in revenue in 2018. In professional sports, fans are very loyal and are used to spending a premium to get unique appeal to standout in the crowd. Moving into professional sports requires working with specific teams and getting their licensing approval, which is contingent upon their ability to cultivate those relationships. Having those deals will create a moat around their product allowing them to have a niche that is well protected from more generic brands.
Objectives
Marketing Objectives
- Product development- COMPLETED.
- Approach a current NFL license and negotiate a three percent licensing agreement by May 31, 2019.
- Develop and offer products on Cowbucker website for four NFL teams by July 31, 2019.
- Obtain permission for Cowbucker hats to be sold in stadium and in team merchandise stores for four teams by August 31, 2019.
- Sell at least 2,000 units during the 2019-20 season
- Feature Cowbucker hats in stadium and team merchandise stores for 12 more teams for a total of 16 teams by August 31, 2020
S-T-P
Segmentation:
The total available market (TAM) for this product is US NFL Fans. This is a substantially large market with 70% of US consumers considering themselves NFL fans and 52% regularly watching regular season games (Statista Survey. “Would…”;Statista Survey. “Do …”). These fans can be segmented by where they watch their team’s games. This factor will differentiate between people who casually watch football on TV and people who attend watch parties or the games. To measure the attendee segment we compared the 2018 average attendance of 67,042 to the 2018 average viewership per game of 15.8 million to find that 4.28% viewers attended the game (ESPN.com). The number of potential consumers in this segment is larger than this since the individuals who attend the game changes each game. However, for the sake of computation we make a very conservative estimate of 4.67 million people who attend NFL games (4.28% of 109 million). We also estimate 5-10% of viewers attend watch parties. Again, using the conservative estimation of 5% we find that 5.45 million people go to NFL watch parties.
The nature of this product inherently requires segmentation by team. While we intend to eventually serve the markets of all 32 NFL teams, we will initially have a beachhead market of four teams. We segmented teams by region to select attractive teams for the beachhead initial release. Each of these markets will be segmented by the viewing location as discussed in the above paragraph (Appendix II).
Target Market:
Since our product provides a way to stand out while showing team spirit, we feel that to achieve product market fit our target market should be avid fans who watch football in a social setting. This includes the people who attend the games and people who go to watch parties. We find this market to be sizeable market conservatively estimated at 10 million consumers. This figure could likely be more than doubled in reality. Structurally this segment can be difficult to compete in. There is strong competition and licensing acts as a barrier to entry, but we feel that the Bucker is significantly differentiated enough to attain success. Cowbucker’s existing products and resources have proven successful in the similar market of college sports. This market segment is feasible for Cowbucker to flourish.
Key insights into the target market include that they are each a part of a team based subculture. They base a portion of their identity by being a part of this group. They can be motivated by others within this group and key members (players on the team) of their aspirational group. This factor will influence the level of team spirit they are motivated to display. Life stage, personality, and self- image will impact their decision between standing out with the Bucker or blending into the group with a standard team hat. These factors are widely varied across individual consumers. We recommend Cowbucker to target fans who are motivated to show team spirit strongly. This will be a concentrated marketing strategy offering limited products to a specific market.
The beachhead market will consist of four teams. We selected the New Orleans Saints, Dallas Cowboys, Houston Texans, and Tennessee Titans. We have identified these teams to be ideal markets due to their cultural and geographic influences in the South. We expect the Bucker to be particularly successful in these markets due to the cultural influences of these areas. After the first season Cowbucker intends to further penetrate the NFL fan markets by expanding to other teams.
Positioning:
By launching the NFL line Cowbucker is extending their existing brand position to the NFL fan market. The value proposition of the product is the combination of the comfortable and functional aspects of the Bucker with the ability to display team spirit in a unique and notable way. While brands like New Era and Nike produce typical licensed baseball caps and 47 Brand offers licensed caps and bucket hats, the Bucker is highly differentiated from existing products on the market. The competitive advantage Cowbucker can capitalize on is the unique style of the Bucker along with the comfort of sun blocking brim and breathable mesh.
With the unique patented design of the Bucker, Cowbucker will be clearly and deliberately positioned to contrast existing products. Nike, New Era, Fanatics and 47 Brand all produce nearly indistinguishable licensed caps. These hats offer fans a casual way for fans to represent their team, but they do not offer enthusiastic fans a way to strongly show team spirit. 47 Brand has attempted to differentiate themselves by also offering bucket hats and visors. However, they fail to stand out as well as sacrifice functionality. The Bucker achieves each of these things. With this product, Cowbucker will strategically position their brand as the leader in team spirit and functionality (Appendix III).
Marketing Mix:
Product:
We suggested multiple ideas to Cowbucker for their new product such as, making more of a functional outdoor hat, adding more branding to the hats, specifically new teams and sports league, adding new styles of hats, and even branching off into different kinds of apparel like slides and shirts (see Appendix III.). Cowbucker decided to go with, new NFL branded hats on its “Bucker” line up, a shopping product. This made the most sense due to the fact that Cowbucker already has licensing at the collegiate level and has a great product to put it on. Even though it’s a big step from college level licensing to the professional ranks, they have proven to sell lots of those hats which has great potential as NFL merchandise. We felt like Cowbucker could succeed from this because there isn’t anything like this out on the market and it would make a great fit for the fanbase especially for the teams like the Cowboys and Texans. Even though there is no glaring need for this product, it could easily slip into the market and be profitable. We believe this product can be successful in the long run due to the fact that Cowbucker doesn’t need to change the overall product too much other than color and branding. No changes to the actual design of the hat will be a great cost saver. The Bucker hat with NFL branded teams fits very well into the company’s product concepts and potential new products because of the Bucker hat line up Cowbucker has with similar branding. This can become profitable in the long run if it can successfully enter the market and has beneficial marketing to promote the product into the minds of the consumers.
The hat itself is made out of high quality lightweight materials that is breathable for whatever outdoor adventure awaits the consumer. The durable quality of the hats consistently keeps it at peak performance. The look is uniform with the other Bucker hats as well as having the same features like the 360° brim, elastic band for a comfortable snug fit, buoyancy capabilities, and a pocket to hold your valuables. Under the manufacturing label, the hat will carry the Cowbucker logo on the inside of the hat, on the mesh, on the back brim, and on the string. The packaging will depend on who is ordering the product. Individual orders to consumers will consist of a simple plastic wrap to surround the product and then it will be placed into a small box, secondary packaging, for shipping. For large orders, the same plastic wrap will be used as the primary packaging then a larger box that can contain large amounts of the product will be used as secondary packaging. If the buyer needs to return the product, there is a 45 day return policy. There also needs to be a proof of purchase as well as the product needs to be in the same condition it was purchased and the original packaging.
Price:
“The Bucker” branded for University of Oregon cost $35 in the Duck store. While they sell the same hat on Amazon for $20 This is with the store taking their cut along with the University for the team license. Average University licensing costs are 10 percent of the producers gross revenue. An NFL license is 12 percent and then an additional 3 percent royalty to the existing licensee that we work with. This comes to 15% total for license fees. Despite that, we suggest to keep the price at $35 similar to their licensed NCAA hats selling price in retail. Typical licensed snapback hats sell for $25, however we feel the Bucker is unique enough to command a higher price .
We do not recommended that Cowbucker get their own licensing agreement with the NFL. This is costly and not practical for a company their size with their sales volume. Instead, as sports licensing expert Scott Sillcox says, you just need to approach one of the hundreds of already approved NFL vendor and come to a deal with them. The reason why is because the NFL requires new vendors to pay a minimum $100,000 licensing deal. Partnering with already approved vendors happens all the time and there are a number of companies just in Oregon that can be approached. A paid online portal for finding them are available here (https://licensedsports.net/login.php).
The NFL requires a 12% royalty on the vendors sales. So if a manufacturer sells their products to the store for $10, the NFL royalty would be $1.20, not the price the retailer sells it for to the consumer. The additional royalty to the already approved NFL vendor is negotiated on a case by case basis and would likely be based on how much in sales the company believes Cowbucker can generate and how much of a hassle/ liability it would be.
Cowbucker cost is $10, we will sell to the store for $20 which gives us a margin of 50%. This calculation factors in the $3 licensing cost for selling it for $20. The 50% margin is standard in the apparel business The store can then markup that hat $15 and land on a retail price of $35. This will give the retailer a 42% margin. Industry average for a great product in the sporting goods category is 35%
Selling the bucker for $20 to the retailer would mean the store can have a 50% margin. NFL fans also expect to pay a premium for licensed goods. At this price, we will also offset our additional costs with respect to licensing.
Place:
We recommend two different marketing strategies for the two different channels, online and retail. We will sell our product in each NFL teams store, a strategy known as producer to retailer. Once in the team store, fans can buy the product during the game and around the stadium. Since this is an unsought product, we need to get it in front of the consumer while they are at the store looking for team branded products. To help with this, we suggest that Cowbucker produce display wingstacks in the pro shops of the various teams. Consumers also expect to pay more for this product since it is licensed. The second channel strategy would be on our online store which is known as producer to consumer, with Amazon being an intermediary on some of our product. We would then have more control and a higher markup with selling the product online, however, we would also have a higher cost for marketing the product.
Promotion:
We recommend two promotional strategies, a retail one and and online one. For online we would use Facebook ads targeting customers on it and Instagram. We will target first fans of the team that have liked the page and have checked in to the stadium. From there we will target fans who have also liked content that contains the teams name
For retail we will have our products with the sports clothing and accessories. We will make sure we get visibility by adding this right on the side of the aisle, where most people walk by. During the NFL season we will put our hat on a manikin that is also wearing the same team shirt. For example, a manikin with a Texans Bucker hat and Texans shirt.
For business to business sales (retailers, stadiums, etc.), we will offer quantity discounts on mass purchases in order to promote the Bucker hat, in addition to other styles that the retailers may want to purchase. This is a great incentive for team-oriented stores to purchase a larger amount of units, which will stock shelves and gain popularity of this product/brand. If a business chooses to buy under 1000 units a year, we would sell them at $25 per unit. If they choose to buy over 1000 units, they would be paying a price of $20 per unit.
Another promotion strategy is product placement. Getting professional athletes to wear the Bucker hat is a great way to convince their fans to do the same. By sending athletes such as Marcus Mariota, who is an alumnus of UO, a free custom Bucker hat, he may be convinced to wear it in a setting such as a press conference, or any public appearance, where it can draw attention. This is a low cost ($100) option that may or may not be successful. However, there is a very low risk for a potentially high reward.
Giving professional athletes free samples of Cowbucker hats to wear during press conferences and other sporting events could be a great promotional strategy because their fans would see them wearing the hats and want the same product as their favorite athletes. This uses the concept of aspiration groups to gain market interest in this product.
Cowbucker Inc. can also run a sweepstakes, with the grand prize being two Bucker hats and a pair of tickets to the next Super Bowl. This can draw attention to the brand, and the 9 runner-ups can win a Cowbucker hat of their choice. This can be advertised through Facebook and Instagram, which is a common place to draw entries. The hats can also be signed by professional football players to add value and appeal in order to attract more people to enter.
Timeline: (See appendix VI.)
New Product Strategy:
The market Cowbucker wants to serve is a similar market Cowbucker already is in, the sports fan market. Cowbucker already has the collegiate line of “Bucker” hats that combines functional outdoor headwear with your favorite college team. This is perfect for the fan who wants to support their team but also wants a functional hat that doesn’t expose them to the elements.
Idea Generation/ Idea Screening:
Now that Cowbucker already established that their “Bucker” hats work in a similar setting, they should expand this to the professional level such as the NFL. Cowbucker followed the R-R-W model and we believe they can be successful. This should be completed by week two, 1/11/2019 .
Concept Testing/Marketing Strategy Development:
In this stage, Cowbucker will create prototypes and present it to potential consumers. This will get easier when they acquire the licensing from the league. Once Cowbucker has presented the new product to a test group, they will repeat this with new groups until they get enough data to where we are certain they can come up with a solid product a majority of the customers in their target market will enjoy. Our suggested initial target market is NFL teams in the Southern United States as well as teams with open stadiums. We will help further develop Cowbucker’s marketing strategy along the way. We suggest this portion to be completed by week five, 2/1/2019.
Business Analysis:
Once Cowbucker has determined the product they want to sell, they will review their costs and profit projections to predict where this new product could take them. This should be completed by week six, 2/8/2019.
Product Development:
Cowbucker will gather all the necessary materials and created a finished product. They will create enough to test this in the target market. This should take until week 13, 3/29/2019.
Test Marketing:
After enough of the product is completed, Cowbucker will further test it in controlled marketing groups as well as places in their target market whether it’s near the stadium or where licensed product is sold. If this portion does not pan out, Cowbucker will go back to their product and marketing strategy to hopefully revamp it so it hit the marks they missed the first time around. We expect this to be completed by week 18, 5/3/2019.
Commercialization:
Once Cowbucker has successfully entered the marketplace, we can now turn our focus on how they are going to get the product to the consumers. We’d like for this product to be sold at licensed NFL stores year round, but we suggest to push the product during late summer, through fall and winter. This product should be sold in the stadium and vendors near the stadium. It should also be sold in stores that sell other NFL merchandise in that area. This needs to be completed by week 35, 8/30/19, before the 2019 NFL season starts.
Budget: (see appendix VI.)
Income: $200,000
Cost of Goods Sold: $40,000, 20.2%
Payroll/Wages: $110,000, 55.6%
Licensing: $24,000, 12.1%
Rent: $3,000, 1.5%
Utilities: $1,500, .8%
Insurance: $1,500, .8%
Interest and Taxes: $5,000, 2.5%
Depreciation: $1,000, .5%
Advertisement/Promotional Tools: $10,000, 5.1%
Other: $2,000, 1.0%
Total Cost: $198,000
Total Profit: $2,000
Promotional Budget:
Promotional Budget Total: $10,000
Sweepstakes/ Superbowl Tickets: $6,000, 60.0%
Social Media: $1,000, 10.0%
B2B Discount: $2,900, 29.0%
Gift to an Athlete: $100, 1.0%
Appendix I.
Works Cited
Statista Survey. “Would You Describe Yourself as a Fan of Professional Football (Nfl)?.” Statista – The Statistics Portal, Statista, www.statista.com/statistics/660395/nfl-fans-among-us-consumers/, Accessed 30 May 2019
Statista Survey. “Do You Follow Professional Football (Nfl)?.” Statista – The Statistics Portal, Statista, www.statista.com/statistics/660435/us-consumers-following-professional-football/, Accessed 30 May 2019
ESPN.com. “Average Television Viewership of The Nfl Regular Season from 2010 to 2018 (in Million Viewers).” Statista – The Statistics Portal, Statista, www.statista.com/statistics/289979/nfl-number-of-tv-viewers-usa/, Accessed 30 May 2019
Appendix II.
Appendix III
| NEW PRODUCT STRATEGY: The market Cowbucker wants to serve is a similar market Cowbucker already is in, the sports fan market. Cowbucker already has the collegiate line of “Bucker” hats that combines functional outdoor headwear with your favorite college team. This is perfect for the fan who wants to support their team but also wants a functional hat that doesn’t expose them to the elements. This new product will fit right in to Cowbuckers current line up of products due to Cowbucker not having to change much to its original product.Idea Generation: · New Branding , i.e. NFL· Entirely new product, like slides or shirts.· A more functional outdoor hat.· Branded outdoor hats with Cowbucker branding. |
Appendix IV.
Appendix V.
ENTER FOR YOUR CHANCE TO WIN!Grand prize winner will receive a pair of cowbucker hats AND a pair of tickets to the Super Bowl Additional 9 winners will receive a cowbucker hat of their choice.   |
Appendix VI.
