SUUNTO PROJECT “RAMPING UP SALES”

1. SUUNTO PROJECT“RAMPING UP SALES” June 2003 Vantaa, Finland IBD team: Marybeth Thomson Carlos Ramirez Youngsuk Ko Shin Hamanaka

2. TABLE OF CONTENTS • Introduction • Communication Strategy • Distribution Strategy • Marketing Infrastructure • Programs and Tactics • Future Considerations • Appendix

3. INTRODUCTION

4. IN ORDER TO ACHIEVE DESIRED GROWTH, SUUNTO REALIZES THE IMPORTANCE OF TRANSITIONING FROM A STRONG R&D COMPANY TO A GLOBAL DESIRED SPORT BRAND COMPANY . . . • Recent Progress • Already recognized as the leading provider of diving instruments • Gaining meaningful traction among outdoor sports enthusiasts • Planned completion of product matrix for all new markets • All progress supported by the launch of suuntosports.com and an improved customer service infrastructure THE MOST DESIRED SPORT BRAND • Goals and Challenges • Revenue growth expectations and pressure as the future of Amer Group • Market development for “sport instruments” • Brand awareness development with limited marketing resources in Finland or abroad • Balance between R&D and marketing skills to surpass the transition phase • Suunto Achievements • Top technology company • Extremely knowledgeable R&D group • Professional and ambitious team on board • Well establish brand name in the diving category • Successful introduction of products • Diversification into new markets

5. . . . AND TO SUCCESSFULLY FACILITATE THIS SHIFT, THE COMPANY MUST UNDERSTAND THE END CUSTOMER WHEN DEVELOPING MARKETING STRATEGIES Consumer needs as the driver • R&D • Suunto’s Goals and Strategy • New Product Development • Customer Feedback • Distribution Decisions • Distribution Feedback • Communication Strategies • Market Research & Analysis Consumer • Pricing Decisions

6. SPECIFICALLY, THE COMPANY SHOULD IMPLEMENT A CONSUMER BEHAVIOR MODEL CREATED AROUND HOW CUSTOMERS THINK, FEEL AND BEHAVE TO GUIDE DECISIONS PERTAINING TO PRODUCT, MESSAGE, PLACEMENT AND PRICING Think Brand Awareness Feel Product Perceptions Behave Purchasing Decisions Consumer Behavior Building Consumer Behavior Profile

7. OUR TEAM DEVELOPED THE PRELIMINARY MODEL USING INFORMATION AVAILABLE WITHIN THE COMPANY AND FROM RETAILERS IN THE U.S. WITH THE OBJECTIVE OF UNDERSTANDING GENERAL CONSUMER BEHAVIOR CHARACTERISTICS THAT SHOULD BE CONSIDERED WHEN ESTABLISHING COMMUNICATION AND DISTRIBUTION PROGRAMS Building Consumer Behavior Profile Input • Store buyers interviews Think Brand Awareness Communication Programs • Store visits Feel • Suunto Product managers Product Perceptions • Suunto survey Distribution Programs Behave Purchasing Decisions Consumer Behavior • Microsoft Research Answers to who, why, how and where from the customer perspective SUUNTO MUST INTERNALIZE THIS PROCESS AND CONTINUOUSLY DEFINE THE CONSUMER BEHAVIOR PROFILE

8. Need Recognition Search for Alternatives Evaluation of Alternatives Purchase of the Product Use of the Product BY UNDERSTANDING WHO IS SUUNTO’s POTENTIAL CUSTOMER, WHY HE BUYS, HOW HE SEARCHES FOR INFORMATION AND WHERE HE BUYS, SUUNTO WILL BE IN A BETTER POSITION TO DESIGN MARKETING STRATEGIES THAT WILL ULTIMATELY HELP THE COMPANY TO INCREASE SALES Median age of 30 High education level Technology proficient Male dominated Active participant Part of a community Potential Customer High average income Trend setter Influenced by heroes Why do consumers desire a product? Performance improvement; Performance verification; Direction; Safety; Image; Status Think How do consumers develop knowledge of product? User advocates; Role model influence; Independent research; Retail salespersons; Advertising Feel How do consumers judges benefit of product? Better game;Reliability; Quality; Ease of use; Offers features beyond “needs”; Style; Relative value Where do consumers go to buy the product? Consumers research the product and then go to the nearest store to get the final “push” to back up their decision of buying the product Behave

9. COMMUNICATION STRATEGY

10. UNDERSTANDING SUUNTO’S CURRENT POSITION IN THE MARKET DEVELOPMENT CYCLE IS IMPORTANT TO DESIGNING AN APPROPRIATE COMMUNICATION STRATEGY Market Development Cycle Focus on stimulating solid references and reviews from the Early Adopters SALES Focus on creating brand image and on the communication of proven product results Focus on communicating ability of product to differentiate or improve current performance. Early Adopters Early Majority Late Adopters Laggards

11. MANY COMPANIES HAVE ACHIEVED STRONG BRAND AWARENESS WITHOUT MASSIVE ADVERTISING INVESTMENT, INSTEAD FOCUSING ON BUILDING BRANDS THROUGH GUERILLA MARKETING TACTICS Brand Awareness vs. Ad Spending (Illustrative) Illustrative + Mass media advertising Guerilla Marketing Procter&Gamble Puma Spalding Speedo Brand Awareness Reebok - - + Advertising Spending

12. PUMA AND SPEEDO, BOTH WELL KNOWN SPORTING BRANDS, ARE GREAT EXAMPLES OF EFFECTIVE GUERILLA MARKETING, FOCUSING ON TARGETING CORE CONSUMERS THROUGH SELECTIVE COMMUNICATION METHODS • Ranked 4th in brand awareness(1), spending less than $3M on advertising (2001) • Conveying its message using a "seed-and-spread" strategy • Works with a product placement agency to get its collections on musicians/actors • Has non-financial relationships with artists • Maintains selective distribution in hip stores e.g., Barneys, Urban Outfitters • Successfully created a unique brand image on the street • "We try to build as an alternative, anti-establishment brand" - Global Director of Brand Management • "There's hipness to Puma right now, and that's why they only have to spend $3 million on advertising" • - President and CEO of TSE Sports and Entertainment • Ranked 9th in brand awareness(1), spending $2M on marketing in 2001 • Focuses on PR and relationship with targeted user groups • Signs top swimmers as models/endorsers to get exposure (e.g., Olympics) • 75 Speedo stores help increase brand awareness • Maintains relationship with over 800 swim clubs in US • Closely monitors and understands the consumer needs • "It's not just putting money behind ads, but finding new opportunities and things that will hit your core market, and keeping you finger on the pulse of everything." • - President and CEO of TSE Sports and Entertainment (1) Sports Industry Brand and Athlete Awareness Study (2002) Source: Sporting Goods Business

13. IN ADDITION TO TRADITIONAL DIRECT ADVERTISING TO POTENTIAL CUSTOMERS, SUUNTO’S MARKETING TACTICS SHOULD AIM TO DEVELOP A POSITIVE COMMUNICATION LOOP AMONG USERS AND POTENTIAL CUSTOMERS BY CREATING ADVOCATES FOR ITS PRODUCTS 1. Post Purchase Focuses on the conversion of an existing Suunto user into an advocate who has positive experience with Suunto products and/or services 1 USER 3. User Conversion Focuses on the more traditional advertisement methods as well as on alternative methods to reach out to the target customer base. ADVOCATE 3 2 2. Advocate Outreach Focuses on building the opportunity for advocates to reach out and influence potential buyers POTENTIAL CUSTOMER

14. SUUNTO HAS BEEN ACTIVELY PURSUING VARIOUS PROMOTIONAL ACTIVITIES IN ALL STAGES OF THE LOOP, HOWEVER SUUNTO MAY COORDINATE THE ACTIVITIES BETTER TO ACHIEVE GREATER EFFICIENCY • 1. Post Purchase • Post-purchase support through HelpDesk • Information shared on Suunto Sports.com (Forums, travel logs) • FAQ, User Manual, warranty registration through Suunto. com • 3. User Conversion • Advertisement and product reviews in specialty magazines • Retail support through displays, brochures, and other POP materials • Sponsorships (i.e. Whistler/ Blackcomb Freeride Team) • Trade Shows (i.e. Outdoor Retailer Trade Show) USER ADVOCATE • 2. Advocate Outreach • Whistler/Blackcomb Partnership • Outdoor University • Association with various outdoor organizations (NSP, PSIA) POTENTIAL CUSTOMER

15. COMMUNICATION PROGRAMS SHOULD BE DESIGNED TO SPECIFICALLY REACH CONSUMERS AT ALL STAGES TO ENSURE NEW CUSTOMER ACQUISTION IS STIMULATED THROUGH MANY ANGLES Stage in Loop Initiative Description Tactics • Provide incentives to turn active Suunto users into advocates through positive user experiences • Give exclusive service/support to owners through Suunto.com, Suuntosports.com and other Suunto managed communication channels • Develop and maintain a strong relationship with influential members of the community who actively communicate Suunto’s benefits to other users • Tie up with well regarded schools in each sport segment and coordinate lessons which demonstrate the performance benefits of sports instruments • Trial programs at targeted locations allow potential users to actually experience the benefits of Suunto products before taking the “plunge” • Targeted advertisement through the web and through billboards is an efficient way to reach a larger portion of potential users • Periodic newsletter with user tips, special discount offers, and information on sport related activities Post Purchase Suuntosports. com • Rewards such as Suunto branded hats/t-shirts for posting logs and referring new members • Discount/Giveaways to influential community members (instructors, performers) to create instant advocates Pro Deals Advocate Outreach • Coordinated lessons structured around Suunto products to improve performance Suunto Pro Lessons • Trial programs allowing target users to use product for a limited amount of time Trial Programs User Conversion • Billboard placement on highways leading up to major ski resorts/National Parks Web ads and billboards • Web ads focused on major sports-related sites and technology/travel sites

16. Emphatic TiVo fans came in droves. More than 100 members of the TiVo Community Forum clustered around a barbecue, CASE STUDY: TIVO HAS SUCCESSFULLY DEVELOPED A DEDICATED COMMUNITY AMONG EXISTING USERS BY SUPPORTING USER DRIVEN COMMUNITY SITES SUCH AS TIVOCOMMUNITY.COM AND BY OFFERING EXCLUSIVE SERVICES TO ITS SUBSCRIBERS Post Purchase Total Cumulative Subscriptions The company encourages TiVo owners to host what might be dubbed "TiVo-ware parties," … TiVo-ware parties give non-users the chance to experience some of TiVo's features, such as pausing the show or rewinding it for an instant replay. TiVo sometimes creates special content around a big event, such as the Super Bowl or the Oscars, that only TiVo owners can watch. – Fast Company 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Apr 30, Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, Oct 31, Jan 31, 2001 2001 2001 2002 2002 2002 2002 2003 swapping screen names and software-upgrade tips.Most of them had never met. The thread that binds these tech fans together is an unabashed love for TiVo,the digital video recorder with a Mac-like devotion and following.– Tech TV

17. CASE STUDY: PALM SUCCESSFULLY LAUNCHED ITS PDAs WITH MINIMAL ADVERTISEMENT SPENDING, INSTEAD RELYING HEAVILY ON WORD-OF-MOUTH INITIATIVES SUCH AS MONEY-BACK GUARANTEES AND REFERRAL PROGRAMS Advocate Outreach • The April 1996 launch of the PalmPilot™ in the U.S. market went ahead with a launch budget of less than $5M • Palm began by “seeding models with influential analysts and journalists to get a buzz going...” (Khermouch, 1997) • A no-questions-asked, money-back guarantee was offered to reduce the purchase risk to consumers • Finally, simple customer loyalty programs were established, rewarding customers who referred new customers to Palm Source: BusinessWeek

18. CASE STUDY: SUBARU HAS SUCCESSFULLY BRANDED ITSELF AS A SUPPLIER OF RUGGED OUTDOOR VEHICLES BY ASSOCIATING ITSELF WITH MULTIPLE ORGANIZATIONS THROUGH A VIP PARTNERS PROGRAM User Conversion Subaru VIP Partners Program Members of participating organizations are now eligible for Subaru's VIP Partners Program. This program allows members to purchase or lease any new Subaru vehicle at dealer invoice cost. Savings may be as much as $1,300 - $3,000 off the manufacturer's suggested retail price, depending on model selected.

19. CASE STUDY: POLAR HAS AGGRESSIVELY PURSUED A COMPREHENSIVE COMMUNICATION STRATEGY THROUGH PARTNERSHIPS AND GRASS ROOTS COMMUNCIATION AND HAVE CAPTURED NEARLY 80% OF THE HEART RATE MONITOR MARKET IN THE U.S. User Conversion Polar has integrated various low-cost tactics into a comprehensive communication strategy. As a result they have established themselves as the leading brand for HRMs, and have been wildly successful in converting potential users into actual customers. Sweepstakes Special Events Trial Program Event Participation

20. SUUNTO’S WHISTLER BLACKCOMB PROGRAM DEMONSTRATES THE SUCCESS OF AN AGGRESSIVE APPROACH TO BRAND DEVELOPMENT • Partnership activities include: • Installation of 85 Digital Clocks (with altitude information) at the bottom, middle and top of all lift stations, customer service locations, restaurants and ski schools • Exclusive sponsorship of Whistler/Blackcomb Freeride team • Supply of wristops to the Atomic Dave Murray Racing Camp coaches and to the top 20 Ski Instructors & the 2 Demo Teams • Benefits to Suunto: • Rights to use the Official Whistler/Blackcomb logo in all advertising • Suunto Station installed in the Mountaintop Business center allows S6 users to download data and print results • Visibility to over 2.2 million visitors to the mountains and over 7 million hits on their web site • Realization of $27,000 increase in sales in the Whistler area alone • Cost to Suunto: • $16,000

21. KEY TAKEAWAYS – COMMUNICATION STRATEGY • In order to reach a larger audience of potential customers, Suunto must pursue a more broad-based communication strategy • Many companies have successfully built brand awareness without substantial expense by using creative guerilla marketing tactics to facilitate word-of-mouth momentum • Suunto’s post purchase relationship with users through Suuntosports.com is a strong start to creating a loyal user base that will ultimately drive growth in the U.S. market • In the Tactics and Programs section of this report, specific ideas are outlined. The objective of these programs is to create Suunto advocates, strengthen product awareness and build the Suunto brand • Virtual Caddy, Smart Sailing and S6 Try Me • Additionally, Billboard and Web advertising is recommended in the Tactics and Programs section as a means of expanding reach to a broader audience than current sport specific print media • Targeted partnerships such as that at Whistler/Blackcomb are a highly visible and efficient way to increase awareness among potential customers and create brand loyalty among core users

22. DISTRIBUTION STRATEGY

23. IN TERMS OF DISTRIBUTION, MATCHING THE FUNCTIONS NEEDED TO SERVE SUUNTO’S TYPICAL CONSUMER WITH THE DISTRIBUTION CHANNELS APPROPRIATE FOR THE WRISTOP PRODUCTS RESULTED IN A RANKING LED BY SPECIALTY SPORTS CHAINS, BUT ALSO SHOWS CATEGORY KILLERS AND GENERAL SPORTS ARE INTERESTING CHANNELS TO EXPLORE The Index is calculated as a sum of the average of Primary and Secondary functions, with Primary functions receiving 200% weighting and Secondary functions receiving 100% weighting. Functions/ Characteristics definitions are in the Appendix section; Examples of channels above: Specialty Sports Chain: REI/ West Marine; General Sports: Sports Authority; Technology Category Killer: Best Buy; Watch Specialty – Torneau; Fashion - Barneys

24. AN ANALYSIS OF SGB’s ANNUAL REPORT OF THE TOP 100 SPORTING GOODS RETAILERS IS A USEFUL STARTING POINT FOR ANALYZING SUUNTO’S PENETRATION OF MAJOR RETAILERS IN THE UNITED STATES • Sporting Goods Business Retail Top 100 Top 100 Sporting Goods Retailers – 2001 Sales * Other includes specialty sports retailers for biking, running, fitness equipment, marine, soccer and team sports apparel. Source: Sporting Goods Business, June 2002

25. SUUNTO HAS DEEP PENETRATION OF THE PREMIER OUTDOOR SPECIALTY RETAILERS, HOWEVER CERTAIN STORES MAY BE PERFORMING BELOW POTENTIAL RELATIVE TO THEIR SIZE. STRONG SALES AT GALYAN’S SUGGEST THE GENERAL SPORTS CATEGORY SHOULD BE EXPLORED FURTHER Top Ten Outdoor Specialty Sports Retailers Top Ten General Sports Retailers * Excludes outlet stores Source: Sporting Goods Business, June 2002; Reflects 2001 store sales, 2002 Suunto sales

26. Suunto USA 2002 Sales - % Dollar Volume • Suunto USA 2002 Sales - % # of Stores CURRENTLY, 90% OF SUUNTO USA’s RETAIL RELATIONSHIPS ACCOUNT FOR ONLY 27% OF WRISTOP DOLLAR VOLUME WHILE THE TOP FIVE RELATIONSHIPS* ACCOUNT FOR 41% OF WRISTOP DOLLAR VOLUME * Top five relationships include REI, Army/Air Force, Galyans, Niche Retail, and Backcountry

27. A detail as simple as the product placement can damage the entire pricing, communication and product strategy • It is difficult to communicate a premium brand at high end prices when the product is poorly displayed as shown in the picture taken at Marmot in Berkeley, CA GIVEN A SIGNIFICANT NUMBER OF SUUNTO’S ACCOUNTS ARE INDEPENDENT RETAILERS, SUUNTO MUST MONITOR THAT FUNCTIONS AND CHARACTERISTICS OF SELECTED RETAILERS ALIGN WITH SUUNTO’S BRAND POSITIONING • Monitoring programs such as that recently established with Franklin Resources are important to avoid any damage to Suunto’s image, strategy and ultimately sales MARMOT MOUNTAIN WORKS Store. 3049 Adeline Street, Berkeley, CA

28. OAKLEY HAS TRADITIONALLY EMPLOYED A HIGHLY SELECTIVE DISTRIBUTION STRATEGY, A CASE SUUNTO MAY CONSIDER EMULATING AS IT BUILDS THE SUUNTO BRAND Prior to its recent diversification, Oakley consistently pursued a selective distribution strategy for its sunglasses to: • Limit number of doors • Four years after launching the sunglass line, Oakley stopped soliciting new retail accounts in the US (approx. 7,000 doors were carrying Oakley at that time) • Accounts that failed to meet the Company's standard were eliminated • As of the company’s IPO in 1995, Oakley sold its products through 7,100 selected retailers with a combined total of 9,500 doors. In comparison, Bolle sold its products through more than 14,000 doors • Most of the Company's accounts, other than sunglass retail chains, were single stores • Create an exclusivity to the Oakley brand • Sold primarily to optical, specialty sunglass and sporting goods stores, carefully selected to complement the high-quality image of the product • Never sold in discount stores, drug stores or department stores • Ensure a high standard of service • Selected stores represented specialty retailers with employees that typically were more product knowledgeable, more customer-service oriented, and better able to educate the customer on the superior attributes of the Oakley products • Build account loyalty • Oakley required all of its accounts to agree not to sell or divert Oakley products to unauthorized dealers and such sales were monitored via a tracking code • In return, Oakley products provided strong, reliable margins because of the limited competition and lack of product discounting • Retailers were more likely to give Oakley product prominent shelf space and make timely payments Despite limited account expansion, Oakley grew by increasing sales per account • U.S. sales per door increased 50% from 1992-1995, which equates to a compound annual growth rate of about 22%. The increased sales per door approximate a same-store sales figure • Sales achieved through mix changes and product expansion with limited door expansion at various accounts

29. OAKLEY CONTINUES TO EMPHASIZE CAREFUL MANAGEMENT OF ITS DISTRIBUTION CHANNEL EVEN AS THE COMPANY’S PRODUCT OFFERINGS HAVE EXPANDED More recently, Oakley has diversified its product line and expanded its distribution network, however this was accompanied by the implementation of the Oakley Premium Dealer program (OPD) • Today, Oakley’s products are distributed through approximately 9,200 accounts and 15,600 doors in the United States • Comprised of optical stores, sunglass retailers and specialty sports stores, including bike, surf, ski and golf shops, and motorcycle, athletic footwear and sporting goods stores and department stores • The Company continues not to sell its current season products through discount stores, drug stores or traditional mail-order companies • The OPD strategy was launched in 2000 • Intended to enable consumers to identify retailers that offer the broadest selection and latest Oakley products • OPD partners will carry all categories of Oakley products that are consistent with the store’s offering and are required to carry a minimum level of sunglass inventory as well as obligated to buy at least 50% of Oakley’s new styles • Oakley does not give these dealers preferential pricing, however it offers them exclusive products • The OPD partners are eligible for a cooperative marketing and advertising prioritization that includes a positioning on Oakley’s web site as well as tagging in Oakley’s annual print and outdoor advertising campaigns • For example, Champs qualified for the OPD program in September 2001, and about 650 Champs stores in the U.S. carry Oakley products and 30 stores will have a dominant Oakley selling area featuring sunglasses, footwear, apparel and watches. In addition, the highest volume Champs stores (100 stores) will double its shelf space devoted to Oakley sunglasses • Oakley has enlisted 2,400 U.S. dealers thus far in its OPD program Distribution also now includes Oakley owned stores and store-in-store format with select department stores • Owned stores include 14 O Stores, 5 Oakley Vaults (outlet stores), oakley.com, and 64 mall based specialty sunglass stores

30. DISTRIBUTION TO SPECIALTY STORES IS KEY TO ESTABLISHING THE SPORT COMPUTER IN GOLF AND CURRENT SUUNTO SALES FORCE NETWORKS ARE WELL EQUIPED TO SERVE THIS HIGHLY CONCENTRATED CHANNEL Top Ten Specialty Golf Stores Sales ($MM)- 1997 Golf Channel Retail Sales – 1997 1,200 800 400 Other Mail Order Pro Shops General Sport Specialty Sport* Discount Stores Department Stores * Specialty sport defined as sporting goods stores specializing in four or less product lines Source: SBI Market Profile: Golf Equipment and Accessories 1998; Golf Pro Magazine

31. WHILE INDEPENDENT SPECIALTY STORES DID NOT SCORE HIGHLY IN OUR CHANNEL ATTACTIVENESS INDEX FOR SUUNTO OVERALL, THE GOLF SEGMENT HAS UNIQUE CHARACTERISTICS THAT SUGGEST PRODUCT PLACEMENT IN THIS CHANNEL MAY HAVE MERIT FOR INCREASING BRAND AWARENESS AND CAPTURING CORE GOLF ENTHUSIASTS • Rationale • Pro shops are a good fit for Suunto and should be emphasized even though current sales force networks may not have such reach • Pro shops tend to specialize in high-end equipment and carry niche or impulse oriented items • Demographic profile strongly aligned with Suunto’s pricing strategy • Specialty stores may have dollar volume but not traffic – for example “consumables" such as balls are typically bought at discounters • Challenging Implementation • Fragmented structure of pro shops requires intensive sales function • Initially, this can be reduced by targeting high end resorts and schools only • Additionally, focus should be on GPS mapped courses where technology has prior acceptance • Channel should be valued as a communication tool as well as distribution

32. N-Series Consumer Behavior Profile Trend Setting Info Seekers • Most likely to have MSN as their ISP (26%) • Likely to work in computer related retail (15%) and finance/ consulting/ accounting (12%) Young Mobile Achievers • Always on the go; likes travel • Likely to work in computer related businesses (13%) Sports Enthusiast • Not necessarily “active” • Favorite sports: Football (college and professional) and baseball • In general, younger demographics, high average income, high education level Microsoft Research 2002 OUR CHANNEL ATTRACTIVENESS MATRIX ALSO SUGGESTS THAT TECHNOLOGY CATEGORY KILLERS REPRESENT A POSSIBLE OUTLET FOR WRISTOP COMPUTERS GIVEN THE TECHNOLOGY PROFICIENCY OF SUUNTO’S TARGET CONSUMERS AS WELL AS SUUNTO’S INITIATIVES WITH MICROSOFT AND POSITION AS A SPORT COMPUTER BRAND “Consumer electronic stores like Best Buy and Circuit City have come to be known as the toy store of the American adult male” 2003 Market Study: Information Technology & North American Category Killers- IHL Consulting Group Category Killer Functions and Characteristics • Mass appeal and technology emphasis of the channel reflects target consumer of N-Series • Channel offers benefit for differentiating Suunto as a computer vis-à-vis watches • The channel also represents a good fit for Suunto’s traditional target consumer profile described earlier as technology proficient Right place for target market

33. Given the low margin profits typical of Technology Category Killers’ operations, the current commissions Suunto pays to retailers seems to be suitable for the introduction of the product THE N-SERIES REPRESENTS THE ENTRY POINT INTO THE TECHNOLOGY CHANNEL, HOWEVER SUUNTO SHOULD TAKE THE OPPORTUNITY TO ESTABLISH THE SPORT INSTRUMENT CATEGORY AND CAREFULLY MONITOR THE PRODUCT SUPPLY, BRAND IMAGE AND PRODUCT PLACEMENT STRATEGIC CONSIDERATIONS TO BE AWARE OF WHEN ENTERING CATEGORY KILLERS Commissions • The “No backorder” policies of most Techology Category Killers suggests that Suunto should review the current product supply if it decides to sell through this retailers • Best Buy and Circuit City’s inventory policies and mass purchasing ensure that a given product is in stock and available Product Supply • Category Killers rely heavily on print and TV advertisement. This could be a great opportunity for Suunto to create brand awareness; nevertheless Suunto should target the premier stores that reflect the Suunto brand and monitor that Suunto’s traditional product line is adequately portrayed vis-à-vis the non-sport functions of the N-Series Brand Image

34. KEY TAKEAWAYS – DISTRIBUTION STRATEGY • Suunto has strong penetration of specialty sports retailers, particularly for its x-sports and snow oriented products • Selective criteria should be implemented to ensure that retailers in this channel, many of which are independent operations, reflect Suunto’s premium brand image • In return for the robust margins offered by Suunto, products should be expected to receive high quality merchandising space in selected stores • There appears to be untapped potential among the general sports category, many of which carry a broad offering of outdoor sporting equipment • Store quality in this channel can vary and any further exploration of this channel should emphasize the premium retailers only • In golf, a two-tiered distribution approach should be considered: • Only premium specialty retailers should be targeted and can be easily reached through current Wilson or Suunto in-house sales forces • Pro shops of premier courses offer an opportunity to build product awareness among potential users and align with the demographics appropriate for the G9 • The introduction of the N-Series creates the opportunity for Suunto to bring the whole product line to the technology category killers • Positioning of Suunto as the “sport computer” is strengthened by entering this channel • Opportunity to extend reach to mass audience

35. MARKETING INFRASTRUCTURE

36. TO EVOLVE INTO A MARKET-CENTERED COMPANY, SUUNTO SHOULD ESTABLISH INTEGRATED MARKETING OPERATIONS FOR PRODUCT MANAGEMENT, NEW PRODUCT PLANNING AND MARKETING SUPPORT Key Operational Functions of a Global Consumer Marketing Company • Product portfolio/profitability Management • Product planning & monitoring • Product extension/ termination decision • Brand value maximization • Market research planning • Required data definition • Communication strategy planning • Cooperation w/ other functions • Sales, production, procurement, research, Finance • New product development • Cross-functional team • Decision process (gate) preparation • Continuous ideation for new market opportunities • Market analysis, internal interview, consumer research, etc Brand/Product Management New Product Planning Marketing Support Marketing Research Mid/long term market research planning & implementation Market data collection & maintenance Market research initiated by PM Market research agency mgmt Ad/PR Mid/long term ad/PR planning & implementation Ad/PR info collection and sharing w/ PM Ad/PR effectiveness analysis Ad/PR agency management Suunto needs to develop its own organizational structure to incorporate the key operational functions

37. SUUNTO NEEDS TO STRENGTHEN ITS MARKETING INFRASTRUCTURE COMPOSED OF INFORMATION, PEOPLE AND PROCESS Strategic Marketing Planning Marketing Strategies Branding Pricing Communi-cation Distribution Marketing Mix Brand/Product Management New Product Development Market Research Marketing Operations Information People Process Marketing Infrastructure

38. KEY INITIATIVES TO IMPROVE SUUNTO’S MARKETING INFRASTRUCTURE Infrastructure Description Initial Assessment Key Initiatives Detail • Market analysis based on broad and accurate information about local markets and customers • What information is examined? • Development of capable talents who manage and analyze information • Who is dealing with information? • Efficient/ effective flow of information and interaction among people • How is the process structured? • Solid top-down market overview (size/penetration by sport sector) • Detail info on local markets and consumers (bottom-up) required • Marketer development needs to be improved • Not enough local information / perspective for PM • US branch positioned to focus trade marketing (distribution management) • Consumer DB • Information sharing culture/ organization • Assistant product managers (APM) • Marketing process improvement for HQ • End-user oriented implementation in US branch Information Marketing Information Management People Marketing Specialist Development Global Marketing Process Enhancement Process Source: GlobeSmart, Team Analysis

39. IMPROVEMENT OF MARKETING INFORMATION MANAGEMENT: CONSUMER INFORMATION AND INFRASTRUCTURE TO SHARE IT SHOULD BE ESTABLISHED Information Creation & Maintenance Information Usage & Sharing Technology Culture Development of Consumer Database • Profile of existing customers • Contact/Product/Complaints • Demographic/Preference • Focused database for loyal customers • Special management of active loyal customer (e.g., top 5% ) information • Basis of membership activities and consumer research (e.g., focus group) • Planned by PM/Customer Service • Maintained by Customer Service Spec Information Sharing Culture/Organization Comprehensive and Exhaustive Customer Understanding • Exchange and co-usage of information • Company culture that favors knowledge sharing • IT is only a piece of KM • Multi-dimensional efforts required • Top management initiative • Incentive/reward • Communication/ teamwork Consumer database R&R Financial database (product) Non-normalized market data • Sales/profitability by product/retailer • Managed by finance/control function • 3d party market/ consumer research • Managed by PM Spec Spec R&R R&R

40. ENHANCEMENT OF MARKETING SPECIALIST DEVELOPMENT: ON-THE-JOB TRAINING TO DEVELOP MARKETING SPECIALISTS REQUIRED Introduction of Assistant Product Managers Primary Objectives Marketing Director To develop a capable marketing specialists through mentorship/on-the-job-training PM for X-sport/Snow PM for X-Marine/Golf PM for Diving PM for Compass To strengthen market research by letting APM focus on basic market research and analysis APM APM ............ To help product managers spend more of their time on long-run significant tasks (e.g., NPD) • Support PM’s works • Focus on basic market research • Rotate after 1~2 years

41. ENHANCEMENT OF GLOBAL MARKETING OPERATIONS PROCESS: HQ NEEDS TO HAVE MORE LOCAL MARKET INFORMATION, WHILE US BRANCH COLLECTS INFORMATION AND MAINTAINS RELATIONSHIP WITH END-USERS • Strategic directions • Implementation guideline Marketing Headquarter (Finland) Local Branch (US) • Detail implementation planning • Market monitoring • Consumer/distributor info • Development of global products based on localized information • Research on local consumers (Europe, US, and Asia) • Central management of global marketing activities • Closed loop by monitoring implementation results • First-hand information source on US consumers/distributors • Planning and implementation of detail marketing activities • E.g., user group support 3-1 Marketing Process Improvement End-user Oriented Implementation 3-2

42. KEY TAKEAWAYS - MARKETING INFRASTRUCTURE IMPROVEMENT • Marketing infrastructure can significantly impact on long-term performance • Improvement of marketing infrastructure is a result of combined efforts in information technology, people development, process reorganization • Reward system, incentives, and performance evaluation (e.g., KPIs) should be aligned in accordance • Top management should constantly care about improving marketing infrastructure

43. MARKETING INFRASTRUCTURE ACTION PLAN Items Description Goals Roles&Responsibilty • Consolidation of consumer database • Clear roles & responsibilities in marketing data management • Master plan to develop marketing experts • Assessment of various alternatives including introduction of Assistant Product Manager • Redesign of product development/ management process in headquarters • Assignment of information collection/ implementation planning function in local branch (US) • To increase market-driven consumer understanding (bottom-up) • To build basis to conduct marketing campaigns targeting end-users • To establish systematical infrastructure to develop capable marketers • To strengthen local market understanding in product management/ development in headquarters • To reposition local branch (US) as a local information provider and implementation planner • PM – planning/analysis • Customer service – IT/maintenance/ analysis • Task force under CEO direction - planning • Central board under CEO direction • Marketing Director- planning • Local branch – participation in planning Marketing Information Management Marketing HR Improvement Marketing Process Realignment Suunto needs to consider creating a central discussion board to supervise and make decisions about the marketing infrastructure initiatives

44. MARKETING INFRASTRUCTURE ACTION PLAN : MARKETING INFORMATION MANAGEMENT Objective:To increase market-driven consumer understanding (bottom-up) and to build basis for end-user marketing campaigns • Rationale: • Currently, Suunto is focusing on solid top-down market overview (size/ penetration by sport sector) • Detailed studies on local markets and consumers required to complement the top-down perspectives • Special management of core loyal consumers (“user advocates”) required to improve referral marketing effects • Implementation Direction • (1) Plan/ Design of Consumer Database • A PM will be responsible to consolidate other PM’s opinions and design information specification required for consumer database • Customer Service Manager will participate in planning and lead discussion on practical implementation and technical requirements • The dedicated PM will also develop plans to collect and maintain the consumer information, having close discussion with Commercial Operations and local branches • Marketing Director/ CEO will supervise the progress • (2) Implementation/Analysis • Customer Service Manager will be in charge of constructing IT systems and operating consumer database • Customer Service Team will provide periodic analysis report on consumer data, after agreement with PM’s on the detailed report requirement • PM’s will analyze the consumer database for product management/ development

45. MARKETING INFRASTRUCTURE ACTION PLAN: MARKETING HR IMPROVEMENT Objective:To establish systematical infrastructure to develop capable marketers • Rationale: • Continuous development of capable marketers is a basis for transforming into a marketing-oriented company • Currently only a few of marketing-dedicated people work in headquarters • Implementation Direction • (1) Establishment of Task Force • Under CEO direction, Marketing Director and HR specialist develop a report on marketing HR issues • Assessment of current marketing-related HR practices • Benchmarking of marketing HR in global marketing companies • Development of marketing HR improvement plan • (2) Key Items To Be Reviewed • Organizational change • Potentially introduction of Assistant Product Managers • Revision of recruiting/ selection process • Redefinition of marketing career track • Improvement of marketer education/ training • Revision of reward/ incentive system

46. MARKETING INFRASTRUCTURE ACTION PLAN: MARKETING PROCESS REALIGNMENT Objective: To strengthen local market understanding in product management/ development in headquarters To reposition local branch (US) as a local information provider and implementation planner • Rationale: • Currently, information/perspectives of local markets not provided enough for PM’s at headquarters • Local branch (US) focusing on “trade marketing,” dealing with retailers, not end-users • Implementation Direction • (1) Establishment of Central Board/ Task Force for Process Realignment • CEO will supervise the progress and make decisions • Marketing Director/ PM’s will develop a plan to redesign marketing process in headquarters, incorporating roles and responsibilities of local branches • Commercial Operations/ local branches will participate in the Board and discuss • (2) Key Items To Be Reviewed • (New) Product development/management process • How to incorporate local consumer needs and market situation • Process to communicate local market/ consumer situation to headquarters • Roles and responsibilities between headquarters (PM’s) and local branches • Roles of local branch as a local information source and implementation planning

47. PROGRAMS & TACTICS

48. SUMMARY OF POTENTIAL NEW WRISTOP MARKETING PROGRAMS & TACTICS Program Description Goals Cost and Benefits • G9 training Aid Program; target instructors from very well known golf academies to use G9 as a training aid tool • Create advocates that will spread the word by exposing the benefits of the product • approx $50K to reach approx. +75k players/year Virtual Caddy • M9 training aid program; target sailing instructors of US Sailing Certificate Schools. Idea is to use M9 as a training aid tool • Create advocates that will spread the word by exposing the benefits of the product • approx $47K to reach approx. 20k sailors/year Smart Sailing • “Try out sessions” in the best ski resorts of the US. Place a booth at the central area of the mountain and let skiers try the wristop computer for a few rides • Attract potential buyers by letting them experience the instant satisfaction a wristop computer can provide with a couple of rides • $35K to show the benefits to 11.5k potential users S6 “Try Me” • Billboard ads in targeted areas • Focus on snow and x-sport • Ski resorts/national park • To increase brand awareness • $ 110K with an expected reach of 3.4 million potential consumers Billboards Web Ads • Banner ads in targeted web sites • Generate traffic to Suunto’s web sites • To increase brand awareness • $17K per month to reach 200k potential consumers • New marketing programs are more cost-effective than magazine ads • Magazine ads $16K per month to reach ~90K target consumers(1) (1) 1 page ad for S6 on Skiing Magazine ($15,675 ); target consumers(88K) = target ratio(22%) x circulation (400K) Source: company data, team analysis

49. G9 TRAINING AID PROGRAM: “VIRTUAL CADDY” OVERVIEW Objective: Create advocates that will spread the word by demonstrating the benefits of the product and help build the brand Target: Golf instructors of well known Golf Academies • Rationale: • To capture Golf Academies as marketing media or tool for Suunto, a benefit for the Academy must exist. The top 25 Golf Academies in the U.S. emphasize and sell as a value added service to their customers the fact that they have computerized video analysis, techniques and technology to help the client to IMPROVE THEIR GAME. The benefit is clear for the academies, because Suunto represents another “trainer aid device” to offer to their clients, thus, there could be a competitive advantage for Academies that integrate the G9 as a improvement tool to help their customers….”The latest in training technology” • Technology proficiency of the teachers • 10 out of top 25 are in California, 2 in Carlsbad • Implementation: • Staged roll – out: start in one State (California), try the concept, build strong relationship with your users, create success stories and move to the next state • Selection criteria for the Golf Academies should include: prestige, location, technology usage for teaching purposes (see next slide for a proposed roll-out plan) • Try to develop a certificate for Academies such as the PADI case... For example, “Suunto compliance” or “Suunto inside” (as Intel program) to start creating the image of enabler compan… enabler in the sense of allowing players to improve their game Expected Cost/Benefit:approximately $50K to reach +75k players/year… if just 10% of the players buy the wristop computer, Suunto could achieved the quota for two years

50. G9 TRAINING AID PROGRAM: TARGET GOLF ACADEMIES