Mitch Modell, the CEO of sporting goods retailer Modell’s Sporting Goods, at his office in New York. PHOTO: ANGELA OWENS/THE WALL STREET JOURNAL
Recently, Modell’s Sporting Goods faced a scare from its suppliers when they suspected the company was running bankrupt after hiring a bankruptcy-consulting firm, BRG. The CEO, Mr. Modell reported that the athlete apparel retailer lost vendor confidence with distribution falling from 18,000 daily shipments to 7,000. Most suppliers and their financiers expressed their fear that Modell’s was falling like other sporting chains such as Sport Chalet, Bob’s Stores, Eastern Mountain Sports, and other stores that filed bankruptcy. The recent scenes involved extensive input into sales and marketing where the CEO employed different platforms including personal communication to assure his suppliers that the store was stable. In fact, Mr. Modell reported that he had to present current financial records and ended BRG’s assignment to end the anxiety. With the inconsistent performance of the business, its vendors have important questions that the sporting goods store can address fully through the proposed marketing strategy of pop-up stores to expand beyond New Jersey, New York, and Philadelphia.
Communication has emerged had an important element of marketing. When firms make certain unclear decisions such as Modell’s hiring of a firm well known for dealing with bankruptcy, the management has significant marketing roles. This post highlighted communication and business customer value as marketing elements of stakeholder engagement. Kotler and Armstrong (2010) identified brand conversations and experiences in managing information. Notably, while the customers are the most important assets, handling suppliers can prove challenging when businesses make communication mistakes. The case of Modell’s scare from suppliers and their financiers provided the basis to explore the role of personal selling and ‘over communication.' The management will need to engage in extensive marketing to normalize business operations and resolve the insolvency threat. The firm has planned to open pop-up stores and smaller formats as part of its new market strategy to appeal to suppliers and property owners. Marketing principles will play an important role in Modell's marketing diversification, which makes this post essential for current and future marketing analysis during business dilemmas.
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