TABLE OF CONTENTS

Executive Summary! Mission Statement!! Goals & Objectives! ! Positioning! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 20 21 22 23 24

Strengths & Weaknesses! ! External Analysis! ! ! Opportunities & Threats! ! Competitor Analysis! Customer Analysis! ! !

Marketing Plan Objectives! Options! ! ! ! ! ! ! ! ! ! ! !

Recommendation! ! Marketing Mix! Product Line! Prot & Loss! ! Timeline! ! ! ! ! ! !

Implementation & Segmentation!

Marketing Information!

Sensitivity Analysis! Assumptions!

EXECUTIVE SUMMARY.
! Timberland is the market leader in rugged footwear and has a well-recognized brand name that is trusted by consumers around the world. We provide other footwear and apparel to a wide customer base and successfully compete against corporations several times larger than us. In addition to superior products, the company is committed to environmental sustainability and consistently contributes to conservation organizations. We consider global impact in all the decisions we make and encourage our employees and customers to apply that mindset in their communities. Our commitment to the environment is evident in our products, which feature the latest technology in recycled materials. We constantly evaluate projects to ensure that they adhere to our objectives. As we move forward, we plan to cater to our existing target market with updated products while maintaining the brands classic appeal. We will involve our customers in leading environmentally conscious lives by providing them with the best products to leave a positive footprint wherever life takes them.

2.

MISSION STATEMENT.
Our mission is to equip people to make a difference in the world. We do this by creating outstanding products and by trying to make a difference in the communities in which we live and work. 3.

We demonstrate this philosophy across all facets of our company from our products to our employee involvement in our communities.

GOALS & OBJECTIVES.

Being a leader in environmental sustainability, we follow the Earthkeepers philosophy. This is a strategic sustainability program with the goal of protecting the great outdoors. By partnering with the Outdoor Industry Association (OIA) we attempt to promote an eco-friendly lifestyle by setting a good example for our customers and challenging our competitors to follow suit. ! Beginning in 2006, to enhance transparency and awareness of Timberlands impact on the environment, we included nutrition labels on our shoeboxes12. Just because we provide eco-friendly products doesnt mean we sacrice quality. It is our goal to create products that are durable to withstand harsh conditions. To achieve this goal we are constantly innovating, creating new environmentally-conscious materials, such as Green Rubber. Green Rubber is essentially recycled rubber which contains at least 42 percent recycled materials10.

4.

POSITIONING.
Through our relentless efforts to promote a green lifestyle and provide unparalleled quality, we have positioned ourselves among the top companies in the outdoor industry. Although in 2010 we reported 72.5 percent of our revenues from footwear sales, we have set ourselves up to compete against the top outdoor clothing brands. Timberland is the market leader in rugged footwear sales7, 8. We have worked hard as a company to achieve such a strong reputation in the footwear industry, and we expect that the Timberland name will transfer into the clothing and accessories markets as well. Although footwear remains the largest segment of our sales, successful penetration of these markets will help us compete against larger companies. Timberland sets itself apart from the competition by being at the forefront of the eco-friendly movement. We consider environmental implications in the creation and shipment of all of our products and constantly reevaluate our business processes to eliminate waste. For example, when considering various computers for our office workstations, we carefully selected Dell computers due to the companys commitment to environmental stewardship3.

5.

STRENGTHS & WEAKNESSES.

Strengths
Reputation in eco-friendly environments

Weaknesses
Very reliant upon three main manufacturing partners2

Strong positioning in footwear Brand reputation makes it hard industry to diversify outside of rugged lifestyle

Quality products with exceptional warranty High Protability4

High costs associated with going eco-friendly

Strategic Positioning Globally

6.

EXTERNAL ANALYSIS.
To remain a force in our market, we must focus on the social, political, economic, and technological environments that are beyond our control. By keeping abreast of constant change in the environment around us, we are well equipped to proactively deal with arising issues. Social: Trends in the footwear industry are unpredictable o Since 2004, the classic model for footwear has been successful. The classic model is the trademark product a company is known for. Converses market share spiked from 0.63 percent to 1.07 percent because of their classic styled shoes7. o Creating sustainable products is a trend that is currently popular and is the industrys fastest growing segment beyond 2005. The Deja brand, a sustainable product from Shoes with Souls Inc., is expected to increase 120 percent in one year7. Legal/Political: European markets are being directly impacted by the recent tariff increases on boot imports from China and Vietnam1. Economic: As expected, due to the economic environment of the past couple years, sales of luxury items have declined. The unemployment rate in the US was at 9.3 percent in 2009, 9.6 percent in 2010, and 9.2 percent in June 2011. As a result, consumers have less disposable income to spend while they contribute more toward savings2. Technological: It is both expensive and difficult to keep up with larger competitors technological advances. According to top marketers, the tech cycle, or revolutionary use of technology in the footwear industry, has just begun and will be the dominating factor for years to come7.

7.

OPPORTUNITIES & THREATS.

Opportunities
Increase in Hispanic male population interested in purchasing footwear7

Threats
Tariff increases on products from China and Vietnam

International growth in emerging global markets Increased focus on 20-somethings males fashion interest Increased focus on environmentally friendly footwear7

Changing fashion trends

Counterfeit products distributed through ecommerce

8.

COMPETITOR ANALYSIS.
! Columbia, Nike, L.L. Bean, Wolverine, and The North Face are some of our top competitors. The competitive landscape is ooded by many larger corporations, such as Nike, with signicantly greater resources than we have. Despite their size advantage, however, we are condent that we provide the highest quality product to our consumer. Although these large companies have a diverse collection of footwear, we have successfully overtaken the rugged footwear segment7. Other competitors in this segment include: Columbia The North Face Wolverine Merrell

We have branched out to compete with these larger companies by developing boats shoes, sandals, and dress shoes. Top competitors in other footwear include: Nike Adidas Puma In addition to our footwear line, we also offer clothing and apparel that adhere to our rigorous standards just as our footwear does. Top competitors in this market include: Columbia L.L. Bean Patagonia

9.

CUSTOMER ANALYSIS.
Timberland targets the following three demographics, and we intend to continue providing customers with the quality products they have come to expect from Timberland. It is that quality that has allowed us to amass such a large and diverse following. Workers This category encompasses primarily construction and outdoor workers who need a sturdy, durable boot for everyday use. Comfort and support are of utmost importance. In addition, reasonable prices and high value are also key since this demographic is not particularly wealthy. They expect to get their moneys worth by investing in our product. Outdoor Enthusiasts These are more recreational users of our footwear and apparel. Primarily aged 18-40, this group enjoys outdoor leisure activities such as hiking and camping. This category is very family oriented. Value, comfort, and durability are key factors for customers when choosing their products. Because this demographics use of the product is primarily recreational, they have greater disposable income. Fashionistas This category covers young (aged 18-30), high income, more urban, female consumers purchasing boots for fashion, rather than work purposes. Those who made $70,000 or more per year spent over 2.5 times more than those in a lower income bracket7. 14.8 percent of women bought boots (excluding work boots) compared to 9.5 percent of men7.

10.

MARKETING PLAN OBJECTIVES.

Social Impact We have established a tradition of creating quality, environmentally friendly products, and we intend to expand upon this philosophy. Our competitive advantage is our focus on corporate responsibility11. We will continue to emphasize the importance of community involvement and charitable contributions to eco-friendly organizations, and we will expand our product line to involve our customers in this lifestyle. Our goal is to educate our customers about the importance of being environmentally conscious and providing them with quality products to lead them in the right direction. By purchasing from Timberland, they are not only receiving a top of the line product, but are also making a difference in the environment. Prot ! We have continued growing despite the economic recession. Our revenues are increasing steadily following a dip during the recession, and we are condent that they will continue on a positive path. Our revenues are growing at an extraordinarily high rate in 2011, and it is our goal to have at least a 15 percent growth in this segments revenue by 2016. Market Share Our primary focus is on footwear namely boots. In the athletic footwear market in 2004, hiking and work boots our key products only had a 7.3 percent market share7. Through an aggressive marketing campaign, we hope to increase the appeal of recreational activities, such as hiking, which will, in turn, grow the market in this category to 10 percent by 2015. Timberland will then take advantage of this growth and will be the go-to brand for this consumer.

11.

1.
!

Outdoor Essentials

Timberlands brand is synonymous with outdoor

activities. A large portion of our consumers the Outdoor Enthusiasts group in particular use our products for leisure activities, such as hiking and camping. We have thus far focused on footwear and apparel but now hope to cater to a wider set of needs. This product line would include goods such as tents, sleeping bags, and hiking backpacks. We have an established consumer base which purchases our hiking boots, and this new product line would offer existing customers more quality Timberland products to meet all of their outdoor needs. There are many companies, including

hand, who desire to participate in more intensive outdoor experiences, we would develop a new line of products for activities such as climbing, bungee jumping, and whitewater rafting. Some examples of this new series would include climbing shoes, harnesses, helmets, and lifejackets. We believe that our brand loyalty from our previous products will spill over into this new segment, which

2.
!

Adventurers
For thrill seekers, on the other

encompasses a narrower group from our Coleman, Columbia, and REI, that already exist for this purpose; however, Timberlands quality and brand reputation current Outdoor Enthusiasts group. We want these customers to recognize would make it competitive in this fragmented market.

OPTIONS. 3.
! ! ! ! ! ! Footprint

Timberland in their consideration set when they look to buy equipment for their adventures. While some degree of brand loyalty exists in this segment, we hope to tap into the novice adventurers who are less concerned about specialty brands and trust Timberlands brand name.

The nal option is to create a new product line that embodies the Timberland

philosophy. These boots will have an engraving of a tree on the sole, so whenever you take a step, you leave behind a mark of your dedication to the environment. This is an expansion of the Earthkeepers philosophy. It keeps the integrity of the company while expanding our market share and reaffirming our commitment to sustainability. This product will unify our existing segments under the philosophy of environmental sustainability. We would run a Leave your footprint ad. For every pair of these boots that are sold, we will donate 10 percent to The Nature Conservancy, a leading worldwide conservation organization dedicated to protecting nature and preserving life6.

12.

RECOMMENDATION.
After carefully evaluating the three options above, we decided to pursue the Footprint campaign for a variety of reasons. First and foremost, it is in line with our core philosophies and company objectives. As previously discussed, we prioritize minimizing our environmental impact. Through this campaign, our customers will demonstrate their commitment to the environment. This strategy is also benecial because it has minimal research and development expense. Timberland has already developed a plethora of eco-friendly products, and our new line of boots would use existing technology with a stylish new design and Footprint branding. This product entices current Timberland owners to invest in a new, attractive boot while also catching the attention of new customers. Finally, this plan is in line with our objective of increasing market share. Our advertising campaign would spread the Timberland name and make it synonymous with outdoor activities. We will capitalize on the increase in outdoor recreation, such as hiking, to promote this new product.

13.

IMPLEMENTATION & SEGMENTATION.

! ! ! ! IMPLEMENTATION
! We will run a Leave your Footprint campaign. This campaign will include television commercials and Internet ads, initially raising consumer awareness of our new product. After people have had time to break in their boots, our advertisements will include real-life footage submitted by actual customers leaving their footprints around the world. By utilizing social networking sites, we will gather customer interaction and feedback while spreading the Timberland name and campaign. Also, for every pair of these boots that are sold, we will donate 10 percent to The Nature Conservancy, a leading worldwide conservation organization dedicated to protecting nature and preserving life6.

SEGMENTATION

This product line caters to our existing target demographics. It is appealing to Outdoor Enthusiasts because it promotes the lifestyle they lead while providing Timberland quality. These boots embrace classic styling with a new twist, keeping the Fashionistas interested. Workers appreciate the rugged design and durability. This line also affords customers the satisfaction of doing their part in caring for the environment. Timberlands history of catering to these three demographics has been unsurpassed, and because of that, were condent that customers will continue to purchase Timberland products.

14.

PRODUCT ! The Timberland boot is known for its comfort and durability. Whether its bought to make a fashion statement, hike through a dirt trail, or wear for construction work, the boot is iconic. The product line of green boots will now also emphasize eco-friendliness. The material adheres to the Earthkeepers theme. The materials used include PET linings from plastic bottles, 42 percent recycled rubber soles, organic cotton, and leather that has achieved at least a silver rating status for industry leading water, waste, and energy management from the Leather Working Group. When the boot is no longer useful, it can be disassembled, and at least 50 percent of it can be recycled9. Timberland is also introducing a revamped Classic Boot to customers to satisfy Outdoor Enthusiasts. The lip at the top, the stitching, and the line at the bottom of the boot will all be green, symbolizing the boots eco-friendliness. In addition, there will be a green Timberland logo on the side. To allow customers to see their impact in a more tangible manner, the sole of the boot will come with a tree imprint that will stamp the ground customers walk on. ! Additionally, the Rugged Boot has been developed to satisfy consumers working in construction and forestry. This line is designed for frequent, heavy use. ! As for the niche market of Fashionistas, a stylish boot, chiey intended for women, has been created. The Chic Boot is a more exclusive model for those who wish to appear trendy as well as eco-friendly. Boots will come in different dark colors, primarily black and brown but also plum and mahogany.

M A R K E T I N G M I X .

15.

PRICE ! Timberland will price the Classic Boot at a competitive price of $170. This boot will be the most frequently purchased due its classic reputation and reasonable price. Competitors alternatives, including Columbia and Nike, are in the same general price range. ! The Rugged Boot will offer a lower price of $150. By having a lower price, market share of workers will be gained, as they are looking for a sturdy, long-lasting product that is fairly priced. ! The Chic Boot is designed for consumers who desire a bit of luxury. Because it will be exclusively marketed and will only be sought by a selective consumer population, the price will be higher at $270. While this price point is higher than Timberlands other offerings, the quality of this luxury boot is quite reasonably priced compared to other options in high-end department stores.

PROMOTION ! A marketing campaign will include aggressive advertising for the Footprint product line. Different levels of advertising are needed for every target segment. In order to recognize the growing Hispanic population in the consumer base, the placement of Hispanic actors in commercials featuring the Classic Boot and the Rugged Boot will be necessary. We will place ads in Hispanic magazines, such as Don Juan for the Chic Boot and Hispanic Magazine for the other two segments. The bigger focus will be on TV ads. To further highlight the Chic model, ecofriendly celebrities will be sent free models of the Timberland boots. We will air TV and Internet ads featuring actresses like Natalie Portman and Julia Roberts to target women and actors like Jake Gyllenhall and Bear Grylls to target men.

PLACE ! Timberland has a very strong online presence; it has established full-edged websites for the USA, UK, and Japan8. The Classic Boot and the Rugged Boot will be selectively distributed, like most other Timberland products, through independent outdoor retailers, independent footwear retailers, department stores, athletics stores, and other national retailers8. Dicks Sporting Goods and REI would be rst in line for the Classic Boot. These locations will reinforce the high level of quality and service experience that comes with the brand. ! ! As for the Chic product, curtailing the distribution to high-end department stores such as Nordstrom, Dillards, and Bloomingdales will help promote its exclusivity while still reaching the large market that shops at these stores.

MARKETING MIX.
16.

Classic Boot.

17.

$170

Rugged Boot.

$150
18.

Chic Boot.

19.

$270

MARKETING INFORMATION.
! Our primary objectives are to remain a sustainable leader in the footwear industry, increase our revenues, and increase our market share in the hiking and work boots category. For our new product line to succeed, ample funds need to be allocated toward primary marketing research. The majority of this money will be invested into product testing and observation, surveys, and interviews. The objective of this research is to gain a better understanding of the needs of our customers and to identify what changes must be made to our current prototypes. By conducting primary marketing research we aim to minimize risk and maximize our ability to complete our plan objectives. We believe that since our Earthkeepers line was so successful we will not need to invest too much into this research. Nevertheless, we must test our products before their release to keep up with ever-changing market trends. We plan to focus the most attention on the Fashionistas because it is a source for expansion for Timberland. As for the Outdoor Enthusiast and Worker segments, we plan on using mostly surveys and interviews because Timberland already has a strongly established brand name in these categories.

20.

PROFIT& LOSS.
Timberland "Footprint" Statement of Prot and Loss

(in thousands of dollars)

2012 Revenue Sales-Revenue -$94,860.092013 -$106,243.312014 -$115,805.202015 -$125,069.622016 -$135,075.19-

!!!!!!!!!!!!!!!Less!Charity!Dona/ons

-$(9,486.01)

-$(10,624.33)

-$(11,580.52)

-$(12,506.96)

-$(13,507.52)

-Cost-of-Goods-Sold-

-$46,481.45-

-$52,059.22-

-$56,744.55-

-$61,284.11-

-$66,186.84-

&&&&Gross&Prot

-$38,892.64-

-$43,559.76-

-$47,480.13-

-$51,278.54-

-$55,380.83-

Expenses Selling-Expense

-$24,787.29-

-$25,035.16-

-$25,285.51-

-$25,538.37-

-$25,793.75-

Project-Development-Expense Project-AdverLsing-Expense

-$3,000.00-$10,000.00-

-$1,500.00-$7,000.00-

-$1,000.00-$3,000.00-

-$800.00-$3,000.00-

-$750.00-$3,000.00-

Total&Expenses

-$37,787.29-

-$33,535.16-

-$29,285.51-

-$29,338.37-

-$29,543.75-

Pretax-Income Tax-Expense Net&Income Present&Value Net&Present&Value&@&4.5%

-$1,105.35-$364.77-$740.59-$708.69-$43,759.47-

-$10,024.60-$3,308.12-$6,716.48-$6,150.48-

-$18,194.62-$6,004.23-$12,190.40-$10,682.40-

-$21,940.18-$7,240.26-$14,699.92-$12,326.78-

-$25,837.08-$8,526.24-$17,310.84-$13,891.10-

ROI Average&ROI

21.

102.93% 151.44%

129.89%

162.13%

174.78%

187.45%

2012
Q1
development prototypes testing

TIMELINE.
! This project focuses on simplicity and leveraging Timberlands strengths. In the rst quarter of 2012, the development of the Footprint line will take place. Focus groups will be formed and small test groups representing our target demographics will provide feedback on the boots. This short development phase is possible because we are modifying an existing (and popular) product. ! After soliciting opinions, we will be prepared to

Q2

launch ad campaign

launch the product in Quarter 2 of 2012, just in time for spring. This launch will optimize our sales because consumers will be in the market for new boots. A great deal of our advertising budget will be spent at this time,

Q3 feedback Q4
modications

informing customers of our new product line and promoting outdoor activities. ! Quarters 3 and 4 of 2012 are vital to Footprint

success because we will receive customer feedback and sales statistics. At this point, we will make any modications necessary for the continued success of the product line, and our marketing campaign will still be in full force. These quarters will lead us into 2013, which we anticipate will be the most successful year for the Footprint line. ! By 2013, Footprint will have made its mark on

2013
high sales minor modications

customers, and we expect sales to soar. Our advertising campaign will become more interactive, with customers submitting videos leaving their footprints around the world. ! As with any new product, hype dies down, and we

2014
monitor success

expect a slower increase in sales in 2014 and 2015. We will carefully monitor sales and make decisions regarding the future of the Footprint line accordingly. Most likely, 2014 will be a big year for research and development for the next major project, taking our company to new heights.

22.

SENSITIVITY ANALYSIS.
100% - MOST LIKELY
Gross-Prot 2012 2013 2014 2015 2016 Net-Income -$38,892.64-$43,559.76-$47,480.13-$51,278.54-$55,380.83NPV -$740.59-$6,716.48-$12,190.40-$14,699.92-$17,310.84$43,759.47-

90% - OVERESTIMATED SUCCESS

Gross-Prot 2012 2013 2014 2015 2016 Net-Income -$35,003.37-$39,203.78-$42,732.12-$46,150.69-$49,842.74NPV -$666.53-$6,044.83-$10,971.36-$13,229.93-$15,579.76$39,383.52-

110% - UNDERESTIMATED SUCCESS

Gross-Prot 2012 2013 2014 2015 2016 Net-Income -$42,781.90-$47,915.73-$52,228.15-$56,406.40-$60,918.91NPV -$814.64-$7,388.13-$13,409.44-$16,169.91-$19,041.93$48,135.41-

23.

Assumptions.
! Footwear makes up 72.5 percent of Timberlands sales8
o

We extended this assumption to all categories of P&L

! !

2012 revenue based on future value of 2010 footwear revenue at 7 percent

o

Sales revenue based on 8 percent of total revenue from footwear

2013 increases by 12 percent; 2014 increases by 9 percent; 2015 and 2016 increase by 8 percent

! ! ! ! ! ! ! !

Charity donations: 10 percent of Footprint revenue Cost of goods sold has rate of 49 percent of revenue, in line with historical data Footprint selling expense is 8 percent of Timberlands total footwear selling expense Tax rate of 33 percent Discount rate of 4.5 percent ROI = gross prot / (total expenses) * 100

24.

WE MADE OUR FOOTPRINT. NOW LEAVE YOURS.

Works Cited.
1. BBC-News.-EU!extends!Chinese!shoe!taris.-December-22,-2009.-Retrieved-October-19,-2011:-hYp://news.bbc.co.uk/2/hi/ 8426432.stm. 2. Datamonitor.-The-Timberland-Company.-Datamonitor,-August-2010:-4. 3. Deveny,-Kathleen.-The!100!Greenest!Companies!in!America.-October-18,-2010.-Retrieved-November-9,-2011:-hYp:// www.thedailybeast.com/newsweek/2010/10/18/the`100`greenest`companies`in`america.html. 4. OneSource.-The!Timberland!Company.-October-2011.-Retrieved-October-19,-2011:-hYp://globalbb.onesource.com/Web/ Reports/ReportMain.aspx?KeyID=28243&Process=CP&CIK=814361&Report=STRENGTHWEAKNESS#16. 5. sustainablebusiness.com.-Sustainability!Leader!Timberland!Acquired!for!$2!Billion.-June-14,-2011.-Retrieved-November-9,2011:-hYp://www.sustainablebusiness.com/index.cfm/go/news.display/id/22540. 6. The-Nature-Conservancy.-About!Us.-2011.-Retrieved-October-19,-2011:-hYp://www.nature.org/aboutus/index.htm. 7. The!U.S.!Market!for!Footwear.-New-York:-Packaged-Facts,-2006,-7,-14,-39,-149,-150,-175,-185. 8. Timberland.-2010-Annual-Report.-2010,-2,-38. 9. Timberland.-About!Us.-2011.-Retrieved-October-19,-2011:-hYp://www.Lmberland.com/category/index.jsp? categoryId=4053695. 10. Timberland.-Product!Philosophy.-2011.-Retrieved-October-19,-2011:-hYp://community.Lmberland.com/Product` Philosophy. 11. Timberland.-Responsibility!M!Execu/ve!Commitment.-2011.-Retrieved-October-19,-2011:-hYp:// responsibility.Lmberland.com/execuLve`commitment/. 12. Timberland.-Responsibility!M!Green!Index.-2011.-Retrieved-October-19,-2011:-hYp://responsibility.Lmberland.com/ reporLng/goals`and`progress/#csr`product_average_gi_score.