THE NEW PRODUCT

The Jarman Manufacturing Company has been in business for 40 years. It employs about 1200
people in plants located in Eugene, Oregon, Glendale, Arizona and Los Angeles, California.
Jarman has always been noted for its major product, canvas deck shoes. For many years, Jarman
held about 17 percent of the casual footwear market and compared fairly successfully with
larger national organizations.

About 1972, Jarman begin to experience severe organizational problems. It had been able to
exist fairly well on its 17 percent share of the market, which had provided a good return on
investment with enough left over for an attractive profit-sharing program for employees. But as
the cost of labor and new raw materials rose, Jarman began to fall on bad times. The Glendale
plant was closed, and 250 employees were laid off. Jarman’s share of the market dropped to just
over 7 percents, as major companies entered the casual footwear field. At the annual meeting of
employees that year, Sam Lyon, Jarman’s president, told workers; “ Things don’t look too good
for us, but we are not going to give up. What we need are new ideas, fresh approaches and
innovative plans. We are going to listen to people, and we are going to try to be flexible when
people have good ideas.”

Dave Murchinson was Jarman’s Los Angeles area sales representative. Recently, Dave’s doctor
told him that he needed to take off 15 pounds. The doctor said that Dave should enter some
kind of exercise program. The thought of going to the gym every day depressed Dave, so he
decided to jog around his neighborhood each morning. Dave begins his jogging program with a
half mile course. Soon he had worked up to one mile and was now running about five miles a
day. He loved the activity. Each morning a feeling of escape and freedom came over him and he
began to hit the pavement. Dave easily lost his 15 pounds, but he enjoyed running so much that
he kept up his program religiously. One thing that Dave noticed each morning as he ran was that
lots of other people were out doing the same thing. It seemed as if everyone he knew either was
running or was involved in some type of exercise program.

In the beginning, Dave had started running in the old pair of tennis shoes he wore when he was
cutting the lawn. But the longer he ran, the less support the shoes gave him. He went to the
sporting goods store to find himself a pair of shoes for running, but all the store carried was
alight track shoe popular with high school and college runners, which sold for $ 45. Dave was
both disappointed and excited: disappointed because he couldn’t find what he wanted, but
excited to share his experiences with his boss. Larry Tuller. Larry was Jarman’s vice president for
marketing. It was his responsibility to handle customer research and make recommendations on
new products.

The next day Dave and Larry met over lunch,” You wouldn’t believe the number of people
running, and yet you can’t find a good pair of running shoes. We’re already geared up to make
these shoes. All we need is a little expert advice, some advertising and a little public relations.
We can produce a shoe runners will buy,” Dave told Larry.

Larry begin to get excited too. Together he and Dave learned all they could about running. They
talked with track coaches, podiatrist, orthopedics surgeons, world class runners and local
joggers. In their research, the two spent nearly $5,000 of company money and were under
pressure to justify their expenses. Finally they had an idea solid enough to sell to Sam Lyon and
the board of directors.

They developed a written proposal of their plan. It had four parts:

1. The development of an advisory committee of running experts to help with the

design of a solid mid priced shoe for runners.
2. The conversion of the Arizona plant to the manufacture of the shoe,
3. The securing of a $300,000 loan to help finance the project, and
4. The mounting of a national sales campaign to promote the Jarman shoe.

After they had presented their written proposal to the board, Sam asked Dave and Larry to make
a brief oral summary of the project. They were very persuasive in their appeals, and the board-
almost as a last resort to save the company- decided to go along with the proposal.

IT took about eight months of lead time to get the shoe designed and into production. Larry was
given authority over the shoe division and Dave was put in charge of marketing and distribution.
For eight months both Dave and Larry work\ked 70 – to 80-hour weeks, often commuting
between company headquarters in Los Angeles and the production facilities in Glendale. Finally,
the Jarman running shoe, under the trade names Street Ponder was ready.

The advertising campaign consisted of displays in sporting goods stores and advertisements in
running magazines. The focus of the campaign was “NOW RUNNERS, A SHOE MADE JUST FOR
YOU”. Because this represented such a large investment for the company, Larry had to
frequently act a liaison between the project and the president and board of directors. He met
weekly with Sam and twice a month with the board.

Dave used all of his sales and marketing expertise. He attended coaches’ conventions, sporting
goods dealer’s meetings and track meets. At a marathon in San Diego, a 26 mile race with many
runners competing, he set up a booth with the Street Pounder on display. To get people to
notice the shoe, he gave complimentary samples to some runners.

The advertising efforts began to pay off. The runner, a magazine written by and for runners, did
a story on the Street Pounder and that said it was the best running shoe on the market. Sales
began to take off. A local Los Angeles runner wore a pair of Street Pounders when he won the
1974 Boston Marathon. Request for the shoe become so numerous that the Glendale plant
could not keep up with the demand. The Eugene plant was converted from deck shoes to
running shoes. Athletes formed the habit of wearing their running shoes even when they were
not running. After just two years, sales topped $5 million nationally.

Larry and Dave knew they had a hit on their hands. But instead of testing on their success, since
they knew their competitors would soon be entering the market, they started thinking up new
products. Plan were begun for a Lady Street Pounder and a Little Street Pounder. They used the
Street Pounder design to produce other models, such as a long spiked shoe for outdoor track.
They put small spikes on the street Pounder for cross-country runners. The designed shoes for
basketball, racquetball, volleyball and tennis. Now the Jarman name is associated with high-
quality athletic shoes. The athletic shoe division has far outdistanced the deck show division in
sales and profits. Jarman is now on solid financial ground.
 DISCUSSION

1. How were intrapersonal, interpersonal, small-group and multigroup levels of

communication used by the company?
2. How did the combination of level of communications facilitate effective managerial
adaptation?
3. From your own work experience explain and describe the situation of which you have
experienced such incidents in your organisation or can this experience be practice in
your organisation.