SWISHER MOWER AND MACHINE COMPANY (SMC)
Introduction
Wayne Swisher, CEO of SMC, is concerned with the company's future prospects. The unit volume sales of the SMC riding mower, which constituted 64% of the total sales of SMC, had plateaued in recent years. He is presented with an attractive private-brand arrangement that can impact SMC's prospects and has to decide whether to accept it. Alternatively, or additionally, he can decide to have more aggressive advertising and sales effort to recruit new dealers and assist current dealers. SMC is also preparing for the introduction of a new Trim-Max product. Wayne's ability to make the right strategic marketing decisions now will decide the destiny of SMC in the future.
Product Line
Swisher Mower Company (SMC), established in 1945, has a current portfolio of three products ? push mower kits, trailmowers and riding mowers. It is also in the process of developing a new product ? all-in-one trimmer, edger and mower. Chart 1 shows the percentage contribution of each of these products to SMC's total sales and Chart 2 shows the percentage contribution of each of these products to SMC's total gross profit in 1995.
Assuming that 80% of the parts business is generated from the sales of the riding mowers, we can infer that 80% of SMC's profit arises from the sales of riding mowers or their spare parts. We can therefore observe that SMC's company's performance is largely dictated by riding mower sales.
Riding Mower
Referring to the material, we observe in Exhibit 7 that there is a rising trend in the unit sales of riding lawn mowers and lawn tractors in the 1990s for the mower and tractor industry. However, Exhibit 1 shows that the sales trend of SMC's riding mowers for the same pe ...