Firearms manufacturer Smith & Wesson had an image problem, and not from the usual politicians and groups opposed to the sale of handguns. No, the company that made Dirty Harry happy with its .44 Magnum found itself with a lot of inventory and too few sales.
The reason behind the decline was weight. For years, Smith & Wesson stuck to building "the most powerful handgun in the world" out of steel. It may have been powerful, but it also was a lot to carry around and shoot.
Other manufacturers developed lighter handguns that were every bit as powerful as Dirty Harry's weapon of choice.
When Smith & Wesson hired its CEO Mike Golden, he found the company had lost share to foreign manufacturers and was quickly moving to non-entity status in the law enforcement and military markets. On the law enforcement side, Austria's Glock was now becoming standard issue in many police forces (65 percent of the market) while Italy's Beretta had become the handgun of choice for the armed forces of the United States.
Mr. Golden, who had never fired a handgun in his life, prior to joining Smith & Wesson, didn't need to be able to hit a target on a firing range to do his job. He did, however, need to develop a plan to go after valuable target markets.
He started out by getting in step with the times and producing lightweight polymer weapons that met the competition, especially in law enforcement and military circles, head-on.
Smith & Wesson launched its M&P (Military and Police) line of lightweight polymer pistols. Today, the .44 Magnum is out but the Wesson SW 1911 is a powerful and much more lightweight replacement.
The changes made by the company appear to have come at the right time. This year, the government will reopen the bidding for the military's handgun contract. Beretta, which has held the contract for 20 years, now has serious competition and some believe Smith & Wesson may displace it.
Smith & Wesson has already had some success in capturing military business. Mr. Golden hired a lobbying firm for government contracts after taking over at the company and it has paid dividends. According to an Associated Press report, the company has made four deals worth $20 million in the past couple of years to supply security forces in Afghanistan.
Where Smith & Wesson has maintained its lead is in the sporting goods market. Seventy-five percent of the manufacturer's sales are generated in this market.
Mr. Golden said the key for Smith & Wesson, in all the markets it serves, ultimately comes down to it fulfilling the promise of its brand name.
"Our research shows that it doesn't matter whether you're male or female, old or young, Democrat or Republican, like guns or don't like guns, the perception of the brand is extremely positive," he said.
Discussion Questions: What lessons are there for retailers and other marketers from the Smith & Wesson experience?