Written Case Study Report
Part B
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Executive Summary
This report will analyse four problems faced by Apex in the current ski boots market. The issues are
analyzed from price, promotion, product, place perspectives. In addition, it evaluates the market position
of Apex by BCG Matrix and product life cycle. Then, the report provides appropriate and practical
recommendations from customer behaviour and Ansoff Matrix to help Apex make marketing strategies in
existing and new markets. Finally, it points the pros and cons of Apex’s price strategy and points out
whether it is ethical.
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Table of Contents
Executive Summary ....................................................................................................................................... 2
1. Introduction................................................................................................................................................ 4
2. Issue Identification ..................................................................................................................................... 4
2.1 Why isn't Apex selling more boots? In your response, identify and detail at least two distinct areas
that are the most significant barriers to Apex's success. Include rationale. .............................................. 4
2.2 Should it be selling more? Does it have what it takes to be a high market share product in the ski
boot category? Why or why not. ............................................................................................................... 5
2.3 Can a high-priced brand such as Apex introduce a cheaper product range without losing its status?
Why/Why not. If so, how. ......................................................................................................................... 6
2.4 Apex’s pricing is higher than the market leaders. Is this good, or bad? Why would people pay more
for Apex products when there are cheaper substitute products? How can Apex make a boot that retails
for $649 and one that retails for nearly a third more- is this ethical?........................................................ 7
3. Conclusion ................................................................................................................................................. 7
4. Appendixes ................................................................................................................................................ 8
Exhibit 1 Estimated U.S. Ski Boot Market Shares .................................................................................... 8
Exhibit 2 Sample Ski Boot Retail Prices by Brand ................................................................................... 8
Exhibit 3 Apex Sales Volume (in units) .................................................................................................... 9
Exhibit 4 Apex estimates for various promotion campaign options ......................................................... 9
Exhibit 5 BCG Matrix ............................................................................................................................. 10
Exhibit 6 Ansoff Matrix .......................................................................................................................... 10
Exhibit 7 SWOT Analysis (Barasz & Gourville 2019) ........................................................................... 11
5. References ................................................................................................................................................ 12
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1. Introduction
Apex is the first ski boot company to invent the unique two-part ski boot system. The boots combine
comfort and professional performance, but their value is not known to customers. Although it has a loyal
customer base and is well regarded, Apex's market share is only 1% and has had no increase in a decade
(Barasz & Gourville 2019) (Exhibit 7).
2. Issue Identification
2.1 Why isn't Apex selling more boots? In your response, identify and detail at least two distinct
areas that are the most significant barriers to Apex's success. Include rationale.
There are a host of reasons Apex boots have not broadly diffused. Indeed, it would be difficult to blame
any single factor. In this report, 4Ps are used to analyse this issue. 4Ps contain four aspects: Product,
Price, Place, and Promotion (Grewal et al. 2021a).
• Firstly, Apex is not selling more boots is because of the price. Price refers to the total cost of
acquiring a product, which involves financial and psychological costs, such as the time and effort
it takes to buy (Blythe 2010). Although the price of Apex's boots has dropped from an initial
$1,300 to $799 (Barasz & Gourville 2019), the boots are still above market standards (Exhibit 2).
For consumers, buying expensive ski boots is not a spur of the moment but rather an activity that
requires high-cost investment, including time, energy, and money (Snowsports Industries
America 2018). It is easy for consumers to doubt the comfort of Apex's advertising, arguing that
the high price does not match the actual value of Apex ski boots and thus abandon their options
and purchases.
• The second reason is about the product - the low alternative characteristic of ski boots, which has
become another major obstacle to Apex's success. Products contain tangible goods and intangible
services (Blythe 2010). The convenience of ski boots determines their less replaceability than
other ski products. Once consumers find their preferred brand, they tend to maintain a high level
of loyalty to the brand. In addition, the uncomfortable feature of ski boots has led all high-end ski
brands to offer consumers the service of modification and adjustment of ski boots, which also
determines that they are less replaceable than other ski equipment. Apex's low brand awareness
and high price make it hard to have more loyal customers, making it harder for Apex to sell more
boots to grab a higher market share. Moreover, salespeople also have doubts about Apex's
performance, which leads them to avoid Apex products when serving customers. This means that
customers may not get the same service as other brands when choosing Apex’s ski boots.
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• The third one is place. Place is defined as distribution channels, including supply chain, market
location and retail (Blythe 2010). Although Apex offers rental service to some sporting goods
retailers, the rental equipment is almost basic and entry-level, which means consumers still can
not experience the high-quality ski boots. Additionally, the online channel does not be well-used
to sell more boots. Many consumers choose to try on ski boots offline then buy them online, but
according to the sales data of Apex, online channels did not create outstanding sales for Apex
(Exhibit 3).
• The final reason is promotion. In this case, promotion is mainly about advertising in social media.
Apex has tried some offline promotion strategies, such as sharing discounts with retailers, but is
helpless. Apex did not play the role of social media in advertising. Most consumers in the ski
market are young people, so advertising on the Internet is the cheapest but most effective
solution. However, according to the promotion data of Apex (Exhibit 4), its promotion investment
on Websites such as Google and social media only accounts for 17.68% of the total cost. The
wrong promotion direction caused Apex to miss the opportunity to attract younger consumers and
thus not sell more boots.
2.2 Should it be selling more? Does it have what it takes to be a high market share product in the
ski boot category? Why or why not.
If only considering the comfort and the professional performance of Apex’s ski boots, they should be sold
more. However, Apex can only sell 5,000 pairs of boots per year, about 1% of the market share, and this
data has not grown effectively for a decade (Barasz & Gourville 2019). In BCG Matrix, it is called 'PET',
which means Apex has a low share and growth and needs to reposition or divest the current brand
(Hanlon 2020).
Firstly, Apex is an innovator, and according to the product life cycle theory, it is currently at the
introduction or growth level (Grewal et al. 2021g). Its sales revenue and market share are relatively low,
but there is great potential to profit.
Compared to the high market share products in the ski boot category, Apex's boots have almost all the
professional features and even comfort. Additionally, Apex's existing consumers are high loyalty and
think highly of Apex's products (Barasz & Gourville 2019). However, the brand awareness of Apex is
low. Brand awareness can show how much a product is perceived among consumers and affects market
value (Grewal et al. 2021f). Apex positions its boots as high-end products for the high-end ski market.
However, consumers in this market segment have high loyalty to other high-market share products and
are sceptical about the comfort of Apex's advertising. If Apex hopes to become a high market share brand,
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Apex should be aimed at particular groups, like new ski beginners or skiers with leg injuries or old age. A
new brand position may help Apex gain more customers and market share.
2.3 Can a high-priced brand such as Apex introduce a cheaper product range without losing its
status? Why/Why not. If so, how.
High-priced brands like Apex can offer cheaper products without losing their status. It can be explained
by consumer behaviour. Consumer behaviour will influence consumer decision-making through
marketing mix, psychological, social, and situation factors (Grewal et al. 2021c). Firstly, from a
marketing mix perspective, if Apex can launch a cheaper product based on the initial quality, it will
attract more consumers to try or buy Apex products, thereby increasing Apex's brand awareness.
Secondly, Maslow's Hierarchy of Needs mentions the needs of safety and health (Martin & Hill 2012).
Apex's boots attract orthopedic surgeons and are recommended for skiers with leg injuries, which can be
an excellent example for foot health. As a result, Apex can promote health concepts while launching a
cheaper product.
Furthermore, Apex has developed a high-loyalty customer base through high-priced products. Apex can
invite this segment of the customers as a reference group or key opinion leaders to promote the cheaper
products on social media to create a group norm. With the Authority Principle (Fessenden 2018) and the
social validation principle (Guadagno et al. 2013), Apex would not lose its market position but gain a
higher position. That is because consumers will be influenced by self-perception. Self-perception shows
that people induce attitudes without understanding internal cognitive and emotional states (Bem 1967). In
marketing, consumers' self-perception allows them to infer their preference for a product and continue to
use it under the influence of their behaviour and environment.
Ansoff Matrix (CFI 2021) can help Apex develop strategies to launch cheaper products without losing
their status. Ansoff Matrix contains the four parts (Exhibit 6):
• Market Penetration: For existing high-priced boots and existing consumers, Apex can adopt
market penetration strategy. Through promotion, services to persuade consumers to increase the
purchase volume, such as the promotion of seasonal combination products, repair services, VIP
discounts.
• Market Development: Existing high-loyalty consumers can help develop new markets and find
groups of consumers with the exact needs. For example, cooperate with doctors to introduce
boots to skiers with leg injuries and invite existing consumers as reference groups in social media
to persuade others to buy the boots.
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• Product Development: Apex should realise that the cheaper product is not to replace the premium
product but to address customers in different segments of the ski boot market. The product
development strategy helps Apex introduce new products through existing customers to
customers with low or median consuming capability in existing markets.
• Diversification: Apex sells ski boots only, and the market for other ski equipment has not been
developed effectively. Apex can produce ski equipment in the new market. In addition, Apex can
make portfolios for cheaper ski equipment, and high-price boots, such as renting or buying
equipment like skis, can get discounts when buying ski boots.
• Consolidation: Apex also needs to strengthen its current market position and adopt product
differentiation strategies to strengthen customer loyalty.
2.4 Apex’s pricing is higher than the market leaders. Is this good, or bad? Why would people pay
more for Apex products when there are cheaper substitute products? How can Apex make a boot
that retails for $649 and one that retails for nearly a third more- is this ethical?
Apex's pricing is higher than that of market leaders, with advantages and disadvantages. The pro is that
high prices may attract some high-consuming customers and gain loyalty after using. The downside is
that most consumers ignore Apex's comfort because of the high price, causing Apex to lose market share.
However, once a customer has a high level of loyalty to Apex, the customer generally does not choose to
replace other products. In addition, Apex is an innovator and leader in both comfortable and professional
performance ski boots, which determines Apex's brand position in the hearts of consumers.
Through the marketing research (Grewal et al. 2021e), two brands (Exhibit 1) have a similar market share
with Apex, and the highest price is $649.95. Therefore, to compete with them, Apex needs to reduce the
cost of producing boots by increasing research investment to meet the price and quality standards
ethically. The highest price in the market is $799.99 (Exhibit 2), which meets Apex’s high-priced boots.
Apex can promote the health value of its products to customers in different market segments and launch
products at different prices to cope with different competitors. From the perspective of business ethics
(Grewal et al. 2021b), Apex does not break the market rules and is ethical.
3. Conclusion
Apex has high-quality ski boots but does not have the equivalent market share. Apex should readjust and
plan its marketing strategy and better understand users' needs and market positioning.
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4. Appendixes
Exhibit 1 Estimated U.S. Ski Boot Market Shares
Exhibit 2 Sample Ski Boot Retail Prices by Brand
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Exhibit 3 Apex Sales Volume (in units)
Exhibit 4 Apex estimates for various promotion campaign options
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Exhibit 5 BCG Matrix
Exhibit 6 Ansoff Matrix
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Exhibit 7 SWOT Analysis (Barasz & Gourville 2019) (Grewal et.al 2021i)
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