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Giant USA targets sub-$500 bike consumers with new campaign

Published March 19, 2014
Sales director calls it "a long-range strategic change."

NEWBURY PARK, Calif. (BRAIN) — Giant USA is targeting new, entry level bike consumers with a new campaign that includes lower retail prices on 30 models of bikes starting March 31.

The company is calling the campaign "Gateway to Adventure," and said it will be more than just a short-term promotion.

"This is a long-range strategic change," said John "JT" Thompson, Giant USA's executive sales director in a statement Wednesday. "We're making every effort possible to broaden the market and get more new consumers into our retailers' stores."

The price drop will apply to Giant and Liv/Giant bikes in adult and youth sizes. The company is not releasing the new pricing information until March 31.

Thompson said the company is leveraging its own factory connection to retain dealer margins even as it lowers retail prices. "Only Giant can hand-build these best-in-class bikes on the scale needed to guarantee success," he said.

"This is without question a bold, team effort between the factories that build these bikes, Giant USA, and our retailers. There's considerable impact with this strategy, but all of us will come through it much stronger for the future."

The company pointed to recent analyses of the U.S. dealer market, such as one by Gluskin-Townley, that showed ever-increasing average bike prices were resulting in smaller unit sales and lower overall market size. 

"To insure the long-term health of our business, we have to do a better job of attracting new customers who want quality, well-built, IBD-serviced, lower-priced bikes," Thompson said. "We must not lose that business to lesser quality, poorly-built, mail-order, or big-box brands.

"Our Gateway to Adventure models are not overstocks we need to clear out of our warehouses, and this is not some coupon redemption scheme that only lasts for a few days. We're doing this for the long term; we're doing this for the future of our retailer's market strength."

The campaign will be promoted with in-store POP signs and hangtags, as well as promotions to "fitness-minded people – like runners, gym rats, cross-fitters, and yoga enthusiasts."

The new wholesale pricing took effect Monday, and dealers who buy-in at specified levels are being offered partial rebates on bikes they bought at the old pricing as far back as October. 

According to information sent to Giant dealers, the new suggested retail discount on the affected models will range from about $20 off on models selling for under $200, to as much as $40 off higher priced models. For example two models will go from a current suggested retail price of $370 down to $340; two other models will drop from $460 to $420. Across the board, the promised retail margin on the 30 models increases by 2 percentage points. 

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