Cabela's 2006 Annual Report Download - page 10

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6
Gifts and home furnishings. Our gifts and home furnishings merchandise includes gifts, games, food
assortments, books, jewelry, restoration products and home furnishings with an outdoor theme. Our home restoration
products, distributed by Van Dyke’s Restorers, include unusual and hard-to-find antique furniture and vintage home
restoration supplies.
Cabela’s Branded Products. In addition to national brands, we offer our exclusive Cabela’s branded merchandise.
We have a significant penetration of Cabela’s branded merchandise in casual apparel and footwear as well as in
selected hard goods categories such as camping, fishing and optics. Where possible, we seek to protect our Cabela’s
branded products by applying for trademark or patent protection for these products. Our Cabela’s branded products
typically generate higher gross profit margins compared to our other branded products. In fiscal 2006, our Cabela’s
branded merchandise accounted for approximately 37% of our merchandise revenue. By having an appropriate mix
of Cabela’s branded and other branded merchandise, we strive to meet the expectations and needs of our customers
and expand the recognition of the Cabela’s brand.
Marketing
Our marketing strategy focuses on using our multi-channel model to build the strength and recognition of
our brand by communicating our wide and distinctive offering of quality products to our customers and potential
customers in a cost effective manner. Our largest marketing effort consists of distributing over 135 million catalogs
annually in order to attract customers to our direct and retail businesses. We have also established our website to
market our products to customers and potential customers who shop via the Internet. We use both our catalogs and
our website to cross-market our destination retail stores. Our marketing strategy is designed to convey our outdoor
lifestyle image, enhance our brand and emphasize our position in our target markets.
In addition to the use of our catalogs and our website, we also use a combination of promotional events,
traditional advertising and media programs as marketing tools. We sponsor numerous fishing tournaments; engage
in promotional activities related to Professional Bull Riding, or “PBR,” as well as sponsoring Pheasants Forever, the
National Wild Turkey Federation, Ducks Unlimited, Delta Waterfowl, the Rocky Mountain Elk Foundation and other
conservation activities.
Competition
We compete in a number of large and highly fragmented and intensely competitive markets, including the
outdoor recreation and casual apparel and footwear markets. The outdoor recreation market is comprised of several
categories including hunting, fishing and wildlife watching, and we believe it crosses over a wide range of geographic
and demographic segments.
We compete directly or indirectly with other broad-line merchants, large-format sporting goods stores and
chains, mass merchandisers, warehouse clubs, discount stores and department stores, small specialty retailers and
catalog and Internet-based retailers.
We believe that we compete effectively with our competitors on the basis of our wide and distinctive merchandise
selection and the superior customer service associated with the Cabela’s brand, as well as our commitment to
understanding and providing merchandise that is relevant to our targeted customer base. We cater to the outdoor
enthusiast and the casual customer, and believe we have an appealing store environment. We also believe that our
multi-channel model enhances our ability to compete by allowing our customers to choose the most convenient sales
channel. This model also allows us to reach a broader audience in existing and new markets and to continue to build
on our nationally recognized Cabela’s brand.
Customer Service
Since our founding in 1961, we have been deeply committed to serving our customers by selling high-quality
products through sales associates that deliver excellent customer service and in-depth product knowledge. We strive
to provide superior customer service at the time of sale and after the sale through our 100-percent money-back
guarantee. Our customers can always access well-trained, knowledgeable associates to answer their product use and