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A group of three friends, all college roommates, started a sports goods retail business in a partnership 25 years ago, which grew to 125 stores spread across the eastern part of the United States. Fresh merchandising, creative sales strategies, first to market product offerings, and clean and well-laid-out stores were some of the hallmarks of the company. Over time, the growing indifference and lack of an agreed business strategy among the partners saw the business in a precipitous decline. The three partners made an erroneous assumption that the sporting goods business is stable, without noticing the change in industry dynamics. Identify and define the problem, keeping in mind the following three situations: The partners decide to have a big sale featuring some new products. The partners see the industry growing and competitors doing well and wonder why they are not. The partners are adamant. They have been doing this for more than 25 years. They say they know their customers, the business, and the industry.
Estimating a customer's lifetime purchasing potential is important because it helps marketers to:
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