Cabela's 2010 Annual Report Download - page 18

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8
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 2010,
our Cabela’s branded merchandise accounted for approximately one-third 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, expanded use of digital marketing channels in mobile marketing and social networking and other
technology-based approaches, 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 renew efforts in local markets and 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 continue to use our expanding
Retail business to capture 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 136 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 use a combination of promotional events, traditional
advertising, and media programs as marketing tools. We engage in certain promotional activities by sponsoring
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, Quail Forever, Ducks Unlimited, Delta Waterfowl, Trout
Unlimited, and Safari Club International, as well as regional and local events and organizations. We also provide
sponsorship of fishing tournaments and other related habitat and wildlife conservation activities.
We have historically received extensive local publicity from the unique Cabela’s shopping experience when
we open a store. As we enter into metropolitan markets, where the opening of a Cabela’s store may not be major
news, we will supplement any publicity with additional advertising to increase consumer awareness of new store
openings.
Competition
We compete in a number of large and highly competitive markets, including the outdoor recreation, and
casual apparel and footwear markets. The outdoor recreation market is comprised of several categories, including
hunting, fishing, camping, 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 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, our strong credit card loyalty rewards program for our customers, 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