I need you guys write one page of
Excusive Summary:
Political/Legal
Nutcase was founded in Oregon, where there is that states riders under the age of 16 must use a helmet. The maximum fine for violating this law is $25, although there are exceptions to this law, such as if wearing a helmet would violate religious practices. Along with the age-defined limit, Oregon has a statute that “prohibits evidence of failure to wear a helmet form being used in a civil trial”, should a bicyclist be injured or killed (Does Oregon Have a Bicycle Helmet Law).
The Consumer Product Safety Commission (CPSC) tests helmets to ensure they meet a basic standard if they want to be sold in the US. The requirements include: the “peripheral vision test” to ensure a rider can see while wearing the helmet; the “positional stability test”, to ensure the helmet stays on while riding; the “retention strength test”, to ensure the straps keep the helmet on in case of impact; and the “impact attenuation test”, which ensures the helmet provides significant force reduction in the event of force (Bicycle Helmets Business Guidance).
Social
Helmets are a safety item that most people don’t like wearing. Although there is laws requiring certain ages to wear helmets, studies have been conducted showing the percentage of people with head injuries and how the injuries were attained. Bicycle injuries came in at the lowest percentage at 6%, meaning bicyclists were less likely to be hit by a car than a pedestrian crossing the street. Helmet laws caused many people to stop biking, as they’d rather not wear a helmet, which, in turn, caused less people to bike on the road, causing cars to be less aware of bikers. Helmets account for another hindrance in safety, which is people are less likely to be wary on the road when they feel safe, they are more likely to take risks.
There are also people who prefer to wear helmets due to the statistic that there is an 85-88% of injury reduction for people in bicycle accidents
Technological
Helmets are engineered to protect a rider’s head in the event of an impact. Helmets are typically made by covering a layer of Expanded Polystyrene foam (EPS) with a polycarbonate shell. The outermost shell is designed to crack and spread impact along the outside of the shell, before the EPS foam absorbs the more of the force. Helmets are not suitable for more than one impact and must be replaced for safety after an injury.
Options exist for additional safety, such as multi-directional impact system (MIPS) and Koroyd. MIPS allows the shell to slide over the foam to provide additional safety during impact. Koroyd adds an additional layer on the inside of the helmet of polycarbonate honeycombs that will absorb for force by collapsing when impact occurs (Newcomb, Tim).
Economic
Size: $337.2 million (revenue) protective sports equipment industry
- 9% growth
- 65% of total industry is Helmets
- Increase in Bike sales from 2008-2016
1/https://www.bikelaw.com/2014/11/oregon-bicycle-helmet-laws-your-rights-and-duties/
- Competition: No direct competition, as they work in a niche market.
- Non direct competition: Giro, Bell, Schwinn, Specialized, Smith
- Most specialize in road biking helmets
- Key Players: Amer Sports Oyj (6%), BRG Sports Inc. (7.2%), Performance Sports Group Ltd. (17.4%)
- Non direct competition: Giro, Bell, Schwinn, Specialized, Smith
Macro Environment:
Bike purchases have steadily increased in the state of Oregon since 2008. In Oregon, it is required by law that anyone riding a bicycle must wear a bike helmet. The protective sports equipment industry has been steadily increasing at a rate of 0.9% per year (IBIS). Many people are always looking for the latest creative way to express themselves to the people around them. Nutcase helmets give them a way to do that by selecting a unique helmet that suits their personality. This trend has continued to grow and grow throughout the population, especially with millenials who value their individuality and the ability to express it far more than past generations.
Trends and drivers:
- Oregon requires helmet use on bikes
- People looking for a creative way to express themselves, Nutcase provides that option.
- Bike purchases have increased steadily since 2008
- Protective sports equipment industry is increasing at 0.9% every year (IBIS)
- Desire for customization and self expression of the population (millennials specifically)s
Company Analysis
Nutcase is a helmet company, founded by Michael Morrow. Morrow got the idea for Nutcase during a football game between two rival teams in Oregon back in 2000, when he decorated a helmet and got a lot of positive feedback. Michael realized that graphics on helmets were designed for kids and were cheesy or based on cartoon characters which meant there were no fun adult helmets on the market. He believes that any age should be able to ride in a helmet build for fun, be able to express themselves, and not be forced into using generic aerodynamic cycling helmets. Nutcase’s objective is to let people express themselves while staying safe, whether they are on a bike, skateboard, scooter, skate, or any other sport they need head protection. Nutcase was acquired by bravo sports in 2016. Bravo sports includes many brands that predominantly cater to the skate population. This acquisition allowed reps to offer more product. Most promotion is word on mouth, people like and share their helmets. A couple who used Nutcase Helmets on a ride from Alaska to Peru ride.
https://www.qyresearchreports.com/report/global-bicycle-helmet-industry-2016-market-research-report.htm
Sales Strategy
Nutcase uses and outside sales force made up of 15 reps that sell primarily to stores that sell skateboards and places like bicycle shops that cater to outdoor activities where you would need to wear a helmet. The area that each rep is responsible for is largely determined by how far they are willing to travel. Some prefer to stay local and only work in a few markets while others are perfectly content to travel farther in order to get as much business for themselves as possible. Nutcase has been very accommodating to it’s reps in this fashion by allowing them to work as much or as little as they want to. The new corporate owners of Nutcase have started the policy of pushing more for pre-order sales as opposed to the standard methods. The store owners aren’t crazy about this idea because they don’t want the risk of having too much product that they are unable to move. The sales reps are encouraged to push them and make higher commission on pre-orders than regular sales.
None of the reps that Nutcase employs work exclusively for the company. Most of them sell products for multiple companies. Because of that, Nutcase doesn’t really have a formal training process. When they hire a rep, all they really need is a general knowledge of the company and what they have available to sell. Beyond that, the sales knowledge they already have will likely get them through. Nutcase also has a very low turnover rate. The need to develop a formal training program for new hires has not been necessary up to this point.
Sales Operations
Nutcase’s compensation structure is currently 100% commission based for its sales representatives. This encourages employees to work harder to get more money while those who want to work less simply receive smaller areas to cover and contribute less time to the company in exchange for lower sales and commission. Quotas for each area are determined by the industry manager and are based on how the market looks as well as how other helmet companies are doing. The new national director for the parent company is pushing for a $5000 per day sales goal. This is based on Protec which sells products geared toward skating and basic design. It is unclear how that would be divided up between each rep considering that some have much larger areas that they are responsible for than others. It is likely that this is based off of an average amount of territories per rep while the actual quota expected is calculated more on an individual basis based on the area each rep is responsible for.
https://www.themarketreports.com/report/global-bicycle-helmet-market-research-report-2018
Sales Management
Each sales rep will have a budget determined by their direct supervisor. When each sale is made and an order produced, it is sent back to Woody, their sales coordinator, who then submits the orders to be filled. Customers also have the option of contacting Woody directly and placing orders with him instead of with their local sales rep. If this happens, the sales rep that is responsible for that area then still gets credit for the order as if they had sold it themselves.
Nutcase also has a new sales manager who was recently promoted from the parent company, Pro-tech, who bought Nutcase back in 2016. It is currently unclear as to what the new manager’s role because he is inside his first month since his promotion and still adjusting to his new position. He will likely be in charge of hiring and overseeing current sales reps performance as well as establishing their quotas.
(leadership, forecasting, budgets, profitability,
evaluation)
- Leadership- Newly promoted sales manager from Pro-tech, the company who bought Nutcase.
- Evaluation- Reps are commission only, evaluation is determined if more orders come through them, or if customers directly call Woody to fulfill orders. Forecasts: Protech is trying to use the Helmet industry to estimate desired sales for Nutcase,
- Secondary research conducted
Recommendations
Preliminary findings: Nutcase has many potential for changes and growth within it’s business structure communication between reps, managers, and formal structures seem to be lacking. The industry itself has a lot of potential, as biking and exercise has become more and more popular. In Oregon, it is required by law to wear a helmet, and fun, expressive helmets make people more willing to wear them.
More research will be conducted once we have the second interview and are able to find more specific information on the helmet industry (rather than the broader protective sports equipment industry, which we were able to find data for).
Citations:
“Bicycle Helmets Business Guidance.” CPSC.gov, CPSC, 9 Jan. 2018, www.cpsc.gov/Business–Manufacturing/Business-Education/Business-Guidance/Bicycle-Helmets.
“Does Oregon Have a Bicycle Helmet Law?” OregonBikeLaw.com, 13 Jan. 2017, oregonbikelaw.com/oregon-helmet-law/.
Newcomb, Tim. “How a Bike Helmet Works.” Popular Mechanics, Popular Mechanics, 22 Nov. 2017, www.popularmechanics.com/technology/a27081/how-bike-helmets-work/.
Appendix:
- Client Contact Information:
Woody Nevils (Sales Coordinator)
Email: wnevils@bravobikedivision.com
Phone: 1-866-956-8889
- Interview with Woody
- What does the sales process look like in your company? How long does it take to close a sale?
Normally only 2 days for an order to be created and sent out.
Motivation is dependant on the client and rep, proactive reps go to stores to check on inventory and clients. New orders are then sent to woody to check and sent to full fill net team (48 hours or less).
All dealers, have a number direct to woody and woody takes care of it.
Only one protec being integrated with nutcase, new sales manager from protec- Protec is the company who bought nutcase and is integrating their and Nutcase’s products.
How are you compensated via salary, or commission, or both?
woody- just salary
Outside reps- all straight commission. Most reps are multi branded (Nutcase and Pro-tec)
- What expectations are expected in the workplace?
Each rep has their own personality and area. Don’t push image, and wide variety of designs
Kids stores, more fun and flashy.
(Side notes on products) Production and design-¾ new helmets each year, some people want discontinued designs
When discontinued, can suggest another mood/vibe
Discontinued motorcycle division for niche market find a need when discontinued item is almost gone-increase the sale at the last moment
- How do you find new prospects?
Most outside reps, have established customers and rapport, that are still active. To get a sale: go in person, have samples, forward email for what they have, send to rep to go and
meet prospect
5. What characteristics do you look for when hiring a new sales rep?
Depends on the area needed, have specific sales group that goes only to toy stores, looking for some:
High energy, Charismatic, Good foundation in bike division (not toy sales)
Find people who are connect -turnover, reach out to reps in the area first
- What is turnover rate in your sales team?
Only had 2 reps that stopped in the past year, same 15 reps for the past 6 years.
Buy out from Protec changed commission structure.
- How are reps paid/compensated?
commission
- How do you divide up the territories for your reps?
based on where rep lives, by population for particular areas – CA 4-5 for bikes, 4-5 for toys
1 rep/duo team, OR, WA, ID. AL
Seattle guy, mostly stays in Seattle
By population in an area and how much a rep can handle, some like to travel and some like specific area.
- How do you set sales goals and quotas?
New national director trying to have about $5000/day in sales, based on protec (geared toward skating and basic design), based on market of how other helmet companies are doing, really pushing pre season
Publicity:
Metro rud helmet- commuter, closest to a road bike, look up couple in bend, who wore helmet straight through
- How do you evaluate your employees?
Know some reps wont push nutcase as hard, base a little on pre season (first year pushing pre season orders), base them also on how many orders are coming through them, or bypassing and calling into woody directly
Check to see if orders created by them, or customers calling into woody to create order
- Interview with Jeff
- What characteristics do you look for when hiring a new sales rep?
Reps that are in the industry of the product being sold. Good relationships with retailers, looking for a seasoned rep that knows the territory
Bike industry
Calling on retailers, reaching out to friends for recommendations. Traits don’t mean as much as references.
Past time in the industry, reference will matter! retailers/other sales reps,
Personality doesn’t mean as much as will they get the job done.
- How do you set sales goals and quotas?
Looking at year over year numbers, increase by 20-25%
- How do you evaluate your employees?
By performance, hitting goals, opening new accounts
- How are reps paid/compensated? (More detail in compensation/benefits desired)
Strictly commission, that % varies, sometimes vary by pre season, based on what product, who selling to,
increase/decrease based on product pricing, whether discounted or full price, who selling to, etc
There’s a cap, usually commission would go down, usually pretty commission. Not usually overstock items.
- How often do you coach employees/or plan to coach?
Try to coach every year, at a chosen trade show. Could be on a different basis, daily, weekly, unofficially, officially once/year
Not looking for reps that he has to train
15 reps, looking to bring on a few new and make a few changes
