Case study 1: Southern Shoe Company
In July 1991, Southern Shoe Company was a manufacturer of ladies’ wide-fitting, non-
fashion, plastic shoes, and recent sales had fluctuated quite violently in a market that
had demonstrated a very high level of bankruptcies amongst manufacturers. Southern
Shoe Company became very concerned about both the short- and long-term prospects
for the business and having traditionally been a manufacturing concern, was becoming
aware that in order to safeguard the future, marketing principles should be brought to
bear on the situation.
The trouble was that the company didn’t really know what marketing was, nor how it
could be introduced. So a firm of management consultants was called in to take a
preliminary look at the situation.
Some of the problems facing the consultants were as follows:
• Should the company stay in manufacturing?
• Should the company become a distributor?
• Should the company manufacture in leather, plastic, or both?
• Should the company diversify into retailing?
The consultants started by carrying out a thorough programme of desk research in order
to enumerate all the relevant major facts about the market, the consumer, competition,
channels of distribution, industry practice and Southern Shoe Company’s own situation,
vis-`a-vis the market. The purpose was to pinpoint the problems which needed to be
overcome and the opportunities which needed to be exploited, in order that a series of
fundamental decisions could be made regarding the future direction of the company.
One of the first actions by the consultants was to quantify the market for ladies’ wide-
fitting shoes. There were no published statistics and Southern Shoe Company had no
idea how big the market was or where they stood in the market. Clearly, as this was a
vital factor concerning any marketing decisions to be made by Southern Shoe Company,
it was necessary to make some kind of estimate. The method used was to obtain
information relating to the distribution of foot width for women. The Shoe and Allied
Trade Research Association supplied the statistical parameters, which were the result of
a survey which they had recently carried out.
The relevant results of the survey were:
Age range of women 16 and over 26 and over
Mean joint girth 230mm 231mm
Standard deviation of joint girth 11.8mm 12.1mm
The joint width is 0.4 times the joint girth.
From this information it was possible to obtain a set of distributions showing the
percentage of women’s feet in joint girth ranges of one eight of an inch, together with the
corresponding ‘last size’ ranges.
Applying the distribution relating to women aged 16 and above to the 1990 production
figure for women’s plastic footwear, a total of 13.52 million pairs, and using a last girth in
excess of 8½ inches as the definition for wide fitting footwear, it was possible to estimate
the total wide fitting market size as approximately 2.45 million pairs.
Using further published information relating to purchases by type of footwear and the
purchasing pattern of plastic footwear by different age groups, it was possible to arrive at
the figure shown in Table 1 relating to 1990.
Table 1: Purchases of footwear by different age groups
Thus the total market for women’s wide-fitting plastic shoes was estimated at just under
2½ million pairs of which 1½ million pairs were for women in the life range of 35 and
Estimates were then made for market growth up to 1994, as shown in Table 2.
Table 2: Estimated market growth
For the first time, Southern Shoe Company realized that the wide-fitting plastic footwear
market was growing rapidly, from around 3.8 million pairs in 1992 to around 5.2 million
pairs in 1994. It was also believed that the proportion of imported plastic footwear that
was wide fitting was insignificant.
A summary of other factors discovered by the consultants during their survey is as
Material and technical trends
• There was continuing rapid growth in the use of polyurethene and poromerics in
the manufacture of women’s shoes.
• Southern Shoe Company had an excellent image in the trade for technical
competence and had recently introduced flow-moulding machinery, which had
lessened their dependence on individual machining operations and other hand
Southern Shoe Company were in a specialist market with few competitors (about 17)
and were estimated to hold about 18 per cent of the total market for women’s wide fitting
Branding – Fashion
• Southern Shoe Company had two well-known brand names – Piccadilly and
• They also had a considerable ability to produce a wide variety of styles and
Southern Shoe Company possessed great knowledge and experience of the footwear
trade. There were many skills within the management structure which could be further
co-ordinated and developed.
The Company accountant was young and competent and saw the need for tighter
financial control. The company was financially sound.
On the problem side, the following factors were considered by the consultants to be
Most major manufacturers had a degree of vertical integration with the retail trade.
Southern Shoe Company had none, and were therefore more vulnerable in the long term
Southern Shoe Company’s sales were going against the trends in the market.This is
summarized in Table 3.
Table 3: Southern Shoe Company’s sales trends compared with national market
This seemed to show that there needed to be a major realignment of sales effort and
pointed to a lack of direction and control.
Fashion, branding, advertising
• There was an increasing trend towards fashion. Southern Shoe Company were
not accepted in the trade as manufacturers of fashion shoes and had a very staid
image with the trade. Consequently, Southern Shoe Company tended to miss out
on the younger sector of the wide fitting market.
• Manufacturers were concentrating where possible on brand names. Southern
Shoe Company’s sales of branded products were declining.
• Virtually no advertising was done by Southern Shoe Company. Consequently, the
above two problems seemed to be getting worse rather than better.
Southern Shoe Company knew very little about the end user of their products. There had
been no analysis of the wide fitting market, and they did not know who was buying their
shoes. It would be difficult to begin a meaningful marketing programme until they knew
which market segments they should be in.
Management structure, planning and control
Communication channels within Southern Shoe Company were blurred and there was
virtually no business or marketing planning, either short or long term. This was reflected
in the widely fluctuating sales and profits over recent years, which indicated a company
controlled by, rather than controlling, events (see Table 4).
Sales and profits were as shown in Table 5.
Table 4: Communication channels – Southern Shoe Company
Table 5: Southern Shoe Company – total sales and profits 1986–1990
The company was overstocked and there was insufficient liquidity, thereby tying up
capital in non-profit making areas which could have been used to launch a properly-
planned marketing campaign. Financial control could be greatly improved.
In the early 70s, the product mix comprised women’s footwear, mainly of leather, but
also some synthetics, of the following types:
Wide fitting shoes
High heel courts
From early 1988 the company had chosen to specialize in the manufacture of ladies
wide fitting shoes with uppers of plastic because it was not possible to continue
profitably with the previous product and material mix. Plastic wide fitters appeared to be
one area where the company could continue to operate profitably.
The consultants submitted their initial report containing the information which is
summarized above. There was clearly a need for Southern Shoe Company to become
more marketing orientated and they agreed to meet the consultants to consider what
should be done.
Note for students
Students might find it useful to act in the role of the consultants and consider what
advice they would give to Southern Shoe Company following their initial report. This
should enable them to bring out the many issues which they identified whilst studying the