Cabela's 2007 Annual Report Download - page 11

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Hunting equipment. We provide equipment, accessories, and consumable supplies for almost every type
of hunting and sport shooting. Our hunting products are supported by services such as gun bore sighting, scope
mounting, and bow tuning to serve the complete needs of our customer. We also provide items necessary for the
completion of any taxidermy project through Van Dyke’s Taxidermy.
Fishing and marine equipment. We provide products for fresh water fishing, fly-fishing, salt water fishing,
and ice-fishing. In addition, our fishing and marine equipment offering features a wide selection of electronics, boats
and accessories, canoes, kayaks, and other flotation accessories.
Camping gear and equipment. We provide a diverse selection of camping gear and equipment for various
experience levels of outdoor enthusiasts. This product category includes a full range of equipment and accessories
supporting all outdoor activities, including food preparation, outdoor cooking, travel, and outdoor living. In addition,
we include all-terrain vehicles (“ATVs”), as well as accessories for automobiles and ATVs in this category.
Clothing and footwear. Our clothing and footwear merchandise includes both lifestyle apparel and technical
gear for the active outdoor enthusiast, as well as apparel and footwear for the casual customer.
Gifts and home furnishings. Our gifts merchandise includes games, food assortments, books, jewelry, and
art with outdoor themes. Home furnishings merchandise includes furnishings and accents with outdoor themes for
the home and cabin, as well as restoration products. Our home restoration products 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 2007, our Cabela’s
branded merchandise accounted for approximately 35% 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
We seek to increase the amount each customer spends on our merchandise through enhanced customer targeting,
continued introduction of new catalog titles, and the development and marketing of new products. We have taken
advantage of web-based technologies such as targeted promotional e-mails, on-line shopping engines, and Internet
affiliate programs to increase sales. We also are improving our customer relationship management system, which we
expect will allow us to better manage our customer relationships and more effectively tailor our marketing programs.
We will use our expanding Retail business to capitalize on additional customer purchase history and information.
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 140 million catalogs
annually in order to attract customers to our Retail and Direct 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 at our 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 engage in promotional activities related to Professional Bull
Riding, the Iditarod Trail Sled Dog Race, and Dock Dogs, as well as sponsor sportsmen and women advocacy groups
and wildlife conservation organizations, including U.S. Sportsmen’s Alliance, National Rifle Association, National
Wild Turkey Federation, Women in the Outdoors, Rocky Mountain Elk Foundation, Whitetails Unlimited, Pheasants
Forever, Ducks Unlimited, Delta Waterfowl, Trout Unlimited, and Safari Club International, in addition to national,
regional, and local fishing tournaments and other related activities.
In addition, we have historically been able to count on extensive free publicity from the unique Cabela’s shopping
experience when we open a store. As we enter more metropolitan markets, where the opening of a Cabela’s store is
not headline news, we will need to supplement this free publicity with additional advertising to increase consumer
awareness of new store openings.