Tom's Trailer Inc.
Nature of the Trailer Business and Market
Tom Sullivan owns a small recreational trailer business in a suburban community located close
to the mountains.
Tom sales are mostly trailers for vacationing and camping, and a variety of
accessories for those trailers.
The community is relatively small but growing fast.
business is growing due to the growth in the local economy and the lack of competition.
does not have a very aggressive marketing program because he does not need one.
an increase in competition in the near future, however, as the community grows.
Recreational trailers are "big ticket" items with prices that range from a few thousand dollars for
a simple, collapsible trailer to well over $50,000 for large, fully equipped trailers that can sleep
as many as six people.
Because trailers are more a luxury than a necessity, people tend to spend
quite a bit of time shopping for one.
Although Tom has little competition in his community and
people prefer to shop locally, trailers are inherently portable and so people are willing to go
outside the community to shop for them.
Tom's customers are mainly families, outdoor sports enthusiasts, and retired people.
classes of customers tend to evolve into different life styles and because, properly maintained,
trailers can last for many years, Tom doesn't get a lot of repeat business from the same customer.
Many of Tom's customers are first time buyers and require substantial help learning about how to
use and maintain a trailer properly.
The market for trailer accessories is different than the trailer market, but still is tied to trailer
Accessories are much less expensive than a trailer and tend to wear out faster.
examples of accessories include appliances (e.g., small, gas-powered refrigerators, 12 volt lights
and electronic equipment, microwaves), sanitary disposal equipment, appearance packages (e.g.,
sport wheel covers, more stylish curtains), and performance improvements (e.g., larger propane
Auto parts stores sell some basic accessories (e.g., 12 volt lights), but seldom carry an
extensive line of recreational trailer merchandise.
Some of these accessories require regular
replacement while people tend to upgrade others.
Therefore, there is a significant amount of
repeat business in the accessory market.
Because accessories do not cost much compared to the
price of the trailer, people do not tend to go outside the community to shop for them.
because many accessories need to be carefully matched with the specific trailer to make sure
they fit and work properly, Internet sales have not had a major impact on Tom's business.
believes it is important to his business to be able to maintain a balanced inventory that
demonstrates the range of options in both trailers and accessories for his customers and be able to
fill special orders rapidly, particularly for accessories.
Tom carries trailers made by only two or three, major brand vendors.