Timbuk2 Case Study

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1. COMPANY OVERVIEW

Timbuk2 creates, produces, and sells bags. Its products include custom messenger bags, laptop messenger bags, and backpacks, as well as travel bags, totes, duffel bags, camera cases, shoulder bags, laptop sleeves and wallets. The company also offers accessories and clothing. It sells its products through specialty retailers, its own retail store, and online through its website.

2. SWOT ASSESSMENT Strengths At the time Mark Dwight purchased the company, Timbuk2 was a popular bag company that produced a trendy bag at a reasonable price. Timbuk2’s bag was very light but very durable and weather resistant. It had established itself amongst young male and female professionals as a stylish yet practical bag. Timbuk2 had just perfected its production method for creating the custom bags. This system adapted from Toyota greatly reduced the turnaround time for producing the bags, positioning Timbuk2 at the forefront of its industry in terms of mass customization.

Weaknesses At the time Mark Dwight purchased the company, the company had plateaued and was in a slow revenue decline due to poor management and inefficient production methods for its non-­‐custom products. Both of these weaknesses were costing the company a lot of money, so much so that it was on the verge of bankruptcy. It also had a limited product line of four products and while it had a successful website in place, it was still limited to a relatively small market.

Opportunities By continuing to expand their customized line of products, Timbuk2 can continue to produce these items in San Francisco where the company originated. This helps the local economy by employing local residents of the area as well as allowing Timbuk2 to stress its Made in America products at a time when the vast majority of these jobs are being shipped overseas. There is also an opportunity to continue to expand the product line that Timbuk2 offers. This lets Timbuk2 go deeper into their existing markets while at the same time broaden them to new markets.

Threats

Timbuk2 is producing its non-­‐customized products in Indonesia, Vietnam and China. This may concern some of their longtime customers because they may feel

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outsourcing may affect the quality of the product and prevent the support of the local economy. Another threat is that many other companies are producing high quality messenger bags that are much more stylish and relatively inexpensive in terms of cost. These bags may appeal to customers looking for a bag with more “bling” than Timbuk2 can deliver.

3. MISSION STATEMENT Design and produce high quality bags that appeal to the movers and shakers of the world.

4. BUILD YOUR OWN BAG

Every bag Timbuk2 produces is made by hand on an assembly line to the exact specifications of the customer. Customers visit the Timbuk2 website and choose one of nine different styles and many different colours and materials for the panels, body, strap, etc. There are two main objectives for creating the bags this way: 1. Customers are creating their own products. They are actively participating in the design process and as such, it creates a great deal of value for the customer. Much like their customers, every bag Timbuk2 produces is unique. Also, since each bag is produced as the order arrives, it helps to increase customer satisfaction by keeping wait times to a minimum. 2. With customers providing Timbuk2 with the specifications for each bag produced, it improves both efficiency and effectiveness as it eliminates the need for Timbuk2 to design the bags. Also, this allows Timbuk2 to keep its inventory costs down by ensuring only what is needed is produced.

5. TARGET MARKET

Timbuk2’s target market includes young, active, affluent commuters and travellers that want stylish, functional, high-­‐quality bags and accessories for everyday use. At the same time, Timbuk2 has been able to remain true to their roots and is still the preferred bag for professional messengers.

6. POSITION IN THE MARKET

Timbuk2 has captured their target market very well because they mirror a lot of the characteristics of their customers. Most of their target market is environmentally and socially conscious, sociable and unique. Their products are very functional for commuters and travellers, allowing owners to carry everything they might need to a business meeting or for flight across the country.

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Timbuk2 has positioned themselves as a specialty bag company whose high-­‐quality, environmentally safe products are produced by hand by local, mostly immigrant workers who are compensated well and share in the success of the company.

Even though most of their manufacturing has been moved offshore, Timbuk2 still has the reputation of a local company that produces quality goods by hand. This is how they have differentiated themselves from other bag companies whose products are mass-­‐produced completely offshore. Timbuk2 has given the impression to the consumer that that by supporting Timbuk2, they are supporting the local community while receiving a high quality product in the process.

7. MARKETING MIX Product Timbuk2’s main product is the messenger bag. They also offer different styles of bags as well as backpacks, camera cases, wallets, hoodies, T-­‐shirts and hats.

Place

Timbuk2’s products can be purchased at various specialty retails stores, at its own retail store or online through its website.

Price

The price for Timbuk2’s main product, the messenger bag, ranges from $69 for the classic version to $199 for a customized version. Timbuk2’s other products range in price from $2 to $425.

Promotion Timbuk2 relies on its own website for a large portion of its sales. The company uses online advertising to drive customers to the website. Other advertising is done by word-­‐of-­‐mouth, through various blog reviews and testimonials and magazine print ads.

8. STRATEGY

Timbuk2’s strategy has been very successful. By expanding its product line and focusing on the customization model as a way of meeting customers’ demands, Timbuk2 has been quite successful in growing its business. It has streamlined operations and reduced costs while at the same time continuing to offer high quality bags.

I would suggest that Timbuk2 should continue invest in product development, maintain the high quality of its current products and create a distinctive image in consumers’ minds in order to set the brand apart from the competitors. This also relates to Timbuk2’s target market, as the affluent customers would be willing to pay more for the exclusive identity that the brand would carry.

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Also, it might be a good idea for the company to expand into the Far East, where countries like China, Japan or Korea are very urban centric and have a large young professional demographic that put a high value on recognizable icons of the West. Right now, the website serves these markets but it might be worth it to establish an actual physical presence in these markets.