1. Was the decision to avoid the home-center channel a good one? Explain. What are the benefits of sticking with it? What are the concerns? The decision to avoid the home-center channel was an appropriate decision for Stihl Incorporated (Stihl). Stihl’s product line consists of a high quality line of outdoor power equipment: chain saws, edgers, string trimmers, brush cutters, blowers, vacuums, mulchers, and sprayers. In order to differentiate Stihl’s high quality products from its competitors (satisfying buyer requirements), the selected intermediary or channel representative needed to provide the appropriate education on proper product operation, maintenance, and overall performance compared to competitive brands (information). As a
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Stihl products, being high quality, tended to be the product a baby boomer would lean towards since they appreciated the quality and longevity of the tool. Baby boomers are getting older now and research shows a shift from the “Do it Yourself” (DIY) to “Do it For Me” (DIFM) mentality. Baby boomers still want to DIY but in many cases simply cannot and therefore forego using tools and hire someone else to DIFM. There has been a clear trend since the 1990’s of increased DIFM, especially in better-off communities. Generation Xers on the other hand are at their peak tool-buying years, but by comparison to the baby boomers, the population size is approximately 30% less (Baby boomers = 78 Million, Generation X = 55 Million). This shift in population size would create a problem for Stihl in the near future. Generation Y (1985 – 2003) will be buying their homes in the next 5 years and are reported to be spending 5 times as much as the baby boomers had (inflation adjusted) at comparable ages. With a population size of approximately 79 million, this is sure to be an important population to factor in when creating a marketing plan or strategy for Stihl.
Studies are showing that the population is shifting from a white majority to a mixed ethnic majority. The buying trends for each ethnicity are sure to differ and therefore Stihl must be prepared to match that change.
Income Changes: Although it seems that