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Reading the handgun market.

In this presidential election year a number of issues are being brought into focus for the American electorate.

Candidates bombast each other with rhetoric of national health insurance, what to do with the peace dividend (if there is one) rubber Congressional cheques, and the quality of education. Amidst all of this, the one recurring topic which should catch the ear of every gun dealer is the state of the economy.

This focus on economics is being felt in the handgun market across the country. Gunshop owners and salesmen are becoming aware that today's handgun shopper is extremely price conscious. One store owner summed things up by saying, "It's hard to sell a $700 pistol in a $6-an-hour town."

This is a problem for handgun merchandisers across the country. Trends are usually not positively identified until after they are a part of history, but this past Shot Show demonstrated certain key points in the marketing strategies different manufacturers will be using in the coming days.

What's Ahead

Smith & Wesson is America's largest manufacturer of handguns and they have in the past used the Shot Show to unveil a large number of new additions to their line-up.

They didn't this year. In fact, they offered a severe down sizing of their product line just in the months prior to the show -- a tip-off that anything new they had to offer was going to be very significant.

Smith & Wesson did introduce two handguns at the 1992 Shot Show; one was a .357 Magnum revolver to add to their LadySmith line (the Model 65 LadySmith), and the second was an inexpensive 9mm semi-auto pistol (the Model 91 5). Both of these additions probably reveal more about the immediate future for handgun sales in America than many would think.

To identify trends through market research is not always an easy task, but perhaps the firearms industry is fortunate to have Smith & Wesson as an active member. Even though not everyone has the financial resources to purchase this kind of research, Smith Wesson is revealing what the future holds for all.

Selling handguns to women is one market that has been neglected until the Smith & Wesson LadySmith appeared. Whether the local gunshop now stocks an S&W LadySmith or a New England Firearms Lady Ultra .32 Mag in the show case, it is a good bet nothing with a name close to either gun could have been found five years ago.

The woman's handgun market is real, not a "cutesy" (meaning "sexist") marketing ploy like the now-defunct High Standard rimfire revolvers made in designer colors. To take full advantage of the market, merchandisers are going to have to find out what works in their particular niche, whether it be national, regional, or local. If women are interested in handguns for self-defense, and all indications show they are, then retailers must update and revise their sales procedures to best fit this new market during slow economic conditions.

The Trend In Price

The other product introduced by Smith & Wesson this year reflects the difficulty of selling a $700 pistol in a $6-an-hour town. The low cost Model 915 is a move by Smith & Wesson to provide a low-cost 9mm pistol to a market that is becoming increasingly price conscious.

While today's handgun buyer may be able to afford the higher priced product, if the perception is that their job isn't stable and secure, or if they have friends or family that have recently been laid off, they will be reluctant to part with money they may need in the future. That spells lost sales to the gunshop owner.

Some companies are better positioned because of the design and inherent cost of manufacturing than others. Glock is just one example. If they chose to compete on a lower cost basis, they would have an advantage because of the lower input cost with the polymer technology they employ.

Spare Glock magazines can be purchased for an average retail price of $10 (American) across the ocean in the United Kingdom, but the same items cost approximately $24 in this country. What's the reason for this price differential? Glock prices their products according to the market -- in this case, the U.S. market.

If the handgun market experiences across-the-board price reductions, does that mean Glock will match those reductions? There's no sure answer, but this price differential demonstrates just how low any manufacturer using polymer technology can go to remain competitive in the market. If the economy remains slow, it is very possible customers may see movement toward lower prices by those who have the advantage with advanced technology in manufacturing.

Smith & Wesson does not use polymer technology at this time, but there is no question they have a very aggressive management team who will be out researching social and commercial trends to avail themselves of the largest share of the handgun market.

People who examine demographics tell us this will be the first election where the majority of voters are residents of neither the farm, nor the city, but the suburbs. That could mean big changes are in store for the American political system and elected representatives, but more importantly, it means changes in the shooting industry.
COPYRIGHT 1992 Publishers' Development Corporation
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:James, Frank W.
Publication:Shooting Industry
Date:Jun 1, 1992
Previous Article:The mid-year handgun roundup.
Next Article:Colt: what went wrong in Hartford?

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